How to prepare your society’s financial statements

Learn how to prepare your society's financial statements for your year end and annual general meeting (AGM).

You should start preparing your financial statements once your fiscal year ends and plan to finish them in time for your annual general meeting (AGM).

You might need to:

  • hand materials to a bookkeeper;
  • prepare materials for an accountant;
  • plan for time to hold a board meeting so that the board can approve the financial statements; or
  • have two board members sign the financial statements

You can find more information in section 40 of the Societies Act.

Your fiscal year

Your fiscal year starts on the day after your fiscal year end and goes until the following year end.

  • If your year end is March 31, your fiscal year begins on April 1 and goes until March 31 of the following year.
  • If your year end is December 31, your fiscal year begins on January 1 and goes until December 31 of that calendar year.

If your fiscal year ends in the middle of the calendar year, it can be helpful to think of your fiscal year as the one when your fiscal year ended. For example, if your year end is March 31, your fiscal year might be 2021–22. 2022 is the year you'll hold your AGM and report on financials.

If you incorporated a new society

If you recently incorporated, present financial statements that start when you incorporated and end 4 months before your AGM date – refer to section 37(3) of the Societies Act.

You need to hold your 1st AGM within 16 months of incorporating (section 12 of the Societies Regulation).

If you hold your AGM late

If you hold your AGM more than 4 months after your fiscal year end, you should plan to prepare interim financial statements for your members. Interim financial statements show your members what happened during the time that lapsed between your fiscal year end and your AGM.

Calculate your interim period.

  • Take your AGM date and count 4 months backward.
  • The period between your fiscal year end and that date is your interim period.

This is in section 76(6) of the Societies Act.

For example, your fiscal year end is March 31, but you plan to hold your AGM on September 20. You need to prepare interim financial statements from April 1 to May 20, at the minimum.

Basic requirements

Your financial statements need to be:

  • prepared according to generally accepted accounting principles found in the Chartered Professional Accountant’s (CPA) Canada Handbook;
  • approved by the board and signed by 2 board members;
  • reviewed by an accountant if required; and
  • consist of a balance sheet and a statement of revenue and expenditure.

Include a statement of any amounts received as public donations or government funding and specify which department or agency the funding came from.

You can read section 8 of the Societies Regulation for more information.

Details about payment to board members

You need to include the following information.

  • A list of board members or people associated with board members that the society paid during that fiscal year.
  • The amount of payment to each board member.
  • Whether the payment was for being a board member or for a separate contract of employment or services.

You must identify the people paid by their position or title, but you do not need to identify them by name. This is in section 38 of the Societies Act.

Details about wages

If you paid an employee or contractor more than $75,000 in a fiscal year, you must include those details in the financial statements. You must include:

  • a list of all positions that make over $75,000;
  • the amount they were paid, rounded to the nearest multiple of $5,000; and
  • the position or title, or the nature of services they were hired for.

You do not need to include their name.

This is in section 38 of the Societies Act and section 11 of the Regulation.

Details about financial assistance

If a society has received financial assistance, you need to include the amount and the nature of the financial assistance. Financial assistance could be:

  • a loan;
  • a guarantee;
  • an indemnity; or
  • any other kind of financial assistance.

This is in section 39 of the Societies Act.

Class A societies

Class A societies have:

  • $120,000 or more a year in revenue; or
  • assets worth $250,000 or more.

Class A societies need to get a review from an accountant unless their bylaws allow them to waive that requirement.

Class B societies

Class B societies have:

  • less than $120,000 a year in revenue; or
  • assets worth less than $250,000.

At their AGM, they can choose whether or not they want an accountant review.

This is in the definitions and in section 22 of the Regulation.

Planning ahead

We recommend that societies look to the year ahead at their AGM and try to plan whether an accountant review is necessary.

If you are not sure what your revenues will be and whether you’ll have the funds for an accountant review, you can either:

  • pass a special resolution to waive the requirement just in case (if your bylaws allow you to); or
  • plan to have a financial review done.

If your revenues are consistently over $120,000 and your assets are worth more than $250,000, check to see how many years in a row you have already waived. Then, plan to get a review done if necessary.

The following types of review from an accountant qualify:

  • Compilation engagement
  • Review engagement
  • Audit engagement

Find out more in section 23 of the Regulation. Check out the CPA Canada’s Guide to Review Engagements to learn about the differences between the types of financial review.

Appointing an accountant

If you’re required to have an accountant, or think you might be, appoint an accountant at your AGM to hold office until the close of the next AGM.

You can appoint an accountant by vote at an AGM. A simple majority vote in favour will appoint an accountant.

This is in section 124 of the Societies Act.

Who can be an accountant?

Your accountant must be part of a professional accounting association. This could be:

  • a provincial or territorial organization of chartered professional accountants;
  • an institute of chartered accountants;
  • an association of certified general accountants;
  • a society of certified management accountants; or
  • a prescribed professional body governing the auditing or accounting by members.

This is in section 125 of the Societies Act.

The accountant must be independent of the society. That means an accountant cannot be:

  • a board member or officer of the society they're serving;
  • an employee of the society or a subsidiary of the society;
  • a partner, employer, employee or immediate family member of a director or an employee; or
  • someone who could stand to benefit from the society or owns or controls a share or debt obligation of the society.

An accountant must resign if they stop being:

  • part of a professional accounting association for any reason; or
  • independent of the society.

The accountant could also choose to change their circumstances to stay independent.

This is in section 127 of the Societies Act.

Waiving the requirement for a financial review from an accountant

To waive the requirement, Class A societies must:

  • have a provision in their bylaws that allows them to waive the requirement (you can find examples of this provision in our sample bylaw sets);
  • pass a special resolution to waive the requirement at the AGM for the year ahead; and
  • have not waived already for the past 2 years.

Class A societies can only waive for 2 years in a row. This means they must get an accountant review once every 3rd year at minimum.

This is in section 22 of the Regulation.

Mistakes happen. If a board member or an officer finds out information would have required the financial statements to be adjusted before the AGM, they must:

  • share the information with the other board members and the accountant, if they have one;
  • update the financial statements accordingly and send them to their accountant, who must then update their report; and
  • once they receive an updated report from the accountant, the board must send their members the updated accountant’s report and explain the changes.

If an accountant finds that something about the financial statements needs to change after the AGM, then the:

  • accountant informs the board and amends the financial statements with the updated information; and
  • board must send the updated financial statements to members.

Despite your best efforts, sometimes your financial statements are not ready in time for your AGM. If this is the case, you have 2 options.

Option 1: hold your AGM late

If your society has fully transitioned or if it incorporated after April 1, 2021, you can apply for more time to hold your AGM. You can only apply for an extension every 4 years. Find out how to apply for more time.

If you cannot apply for more time, you will be in default until you hold your AGM and file your annual report. You may need to prepare interim financial statements for your AGM. 

We recommend this option if you cannot prepare any financial statements in time for your AGM, even draft ones. Keep in mind that a key purpose of an AGM is to present financial statements.

Option 2: hold your AGM with draft financial statements

We recommend this option if you have draft financial statements from a bookkeeper but cannot have your accountant review ready in time for your AGM. That way you can avoid going into default.

Check your bylaws to see if you need your members to vote to approve your financial statements. If that’s the case, you may need to schedule another special general meeting once you get your reviewed financial statements from your accountant.

If your bylaws do not require a vote of approval from members, you can find another way to present your reviewed financial statements. You could:

  • send members the reviewed finances by email;
  • share them on your website; or

come up with another way to be transparent about the accountant’s report.

Your new fiscal year end comes into effect when you file the change form with the registrar. If your society has recently changed its fiscal year end, you may end up with a shorter or longer fiscal year than usual.

Once you file the form, plan to:

  • hold your AGM within 4 months of your new fiscal year end; and
  • consider the longer or shorter fiscal year when you prepare your financial statements – this might affect your fiscal year’s revenues.

Find out more in section 41 of the Societies Act.