The importance of service performance information

Why report service performance information?

Charities and other not-for-profit entities are a vital part of our society in Aotearoa New Zealand, supporting and encouraging those in need, enabling us to express our unique culture, to engage in sport and other meaningful activities, and care for our environment. The services of charities and other not-for-profit entities (PBEs) are in high demand, and PBEs need resources to achieve what the public expects of them. More than one in five New Zealanders work voluntarily for a charity or not-for-profit entity (giving 150 million + hours a year) and JB Were estimated PBEs receive more than $3.8 billion a year from individual and corporate philanthropy and grants. Significant public funds are also directed towards PBEs. There’s a lot of ‘stakeholders’ who are interested in how their money and other resources are making a difference in Aotearoa New Zealand. Until this year most of the focus on charities’ and not-for-profit entities’ annual reports has been on the dollars and cents, rather than non-financial information on the good work that they do. This has left a gap in meeting what stakeholders need to hear.

How do we report service performance information?

If the charity or not-for-profit entity you work or volunteer for is a Tier 1 or Tier 2 PBE (generally it has more than $2 million in annual expenses), a new reporting standard (PBE FRS 48 Service Performance Reporting) came into effect this year to enable you to expand your reporting to fill this gap. Service Performance Reporting presents an invaluable opportunity to tell your complete story.  As important as financial reporting is, often the most significant activities of a PBE can be better communicated through non-financial information.

PBE FRS 48 establishes principles and high-level requirements rather than specifying detailed reporting requirements. We know that charities are unique, and the principles provide flexibility to express that unique narrative. PBE FRS 48 asks you to articulate contextual information such as why your organisation exists, your organisation’s vision and how it will go about delivering on that. This helps you communicate your entity’s key achievements and demonstrate the difference that has been made to those all-important funders, donors, volunteers, and clients – all this in the same annual report as the financial statements.

How do we choose the best information?

Many charities and not-for-profit entities already check regularly that what they are doing is having the difference they expect. Internally, this monitoring helps improve processes and practice, and ensures the entity is working towards its goals. While this data will be invaluable as inputs to your service performance report, an annual report is aimed at external stakeholders, who need a complete and balanced picture of your entity’s achievements without being overwhelmed with too much information. There’s always a lot going on, and many entities describe service performance reporting as a ‘journey’ as they make choices about what to report and in how much detail. It’s critical that your Board and management team become involved early on in discussions and decisions about what you will report. You’ll also want to spend time thinking about how best to present your information so that it is engaging to read and gets your story across.

Rather than being a compliance exercise; if you really embrace it, service performance reporting is a valuable opportunity to tell your unique performance story of the wider impact your entity has on your community. Start work now to make the most of your reporting on service performance and ensure your annual report tells your unique story!


Carolyn Cordery

Carolyn is Chair of the XRB’s Accounting Standards Board and Adjunct Professor at the School of Accounting and Commercial Law at Victoria University of Wellington.

Editor’s note:

PBE FRS 48 is effective for financial reporting periods beginning on or after 1 January 2022. Service performance information for the previous period is required, including in the year of adoption. The XRB have produced a short guide to help you get started.

Published: 15 August 2022