1. What financial reporting obligations do Canadian charities need to meet?

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Canadian charities have specific financial reporting obligations mandated by the Canada Revenue Agency (CRA) and, if applicable, the Public Sector Accounting Board (PSAB). These obligations include submitting annual financial statements that outline revenues and expenses and complying with regulations to maintain charitable status. Adhering to these standards demonstrates a charity's responsibility and commitment to its cause.

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2. How should charities differentiate between restricted and unrestricted funds in their accounts?

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Charities should differentiate between restricted funds, which donors designate for specific purposes, and unrestricted funds, which can be used for general operational expenses. This understanding helps charities make informed decisions, ensuring transparency and compliance with donor intentions.

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3. What are the best practices for recording and managing donations?

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Best practices for recording and managing donations include:

• Accurate record-keeping.
• Issuing timely tax receipts by CRA guidelines.
• Documenting and utilizing donations correctly, especially when there are specific restrictions.

Transparency in donation management is essential for building and maintaining donor trust.

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4. How should charities account for non-cash contributions such as in-kind donations?

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When accounting for non-cash contributions such as in-kind donations, charities should record them at their fair market value to accurately reflect the charity's resources in financial statements.

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5. What are the regulatory requirements for executive compensation and financial controls in charities?

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Charities must ensure that executive compensation is fair and aligned with industry benchmarks. This not only ensures ethical practices but also compliance with CRA guidelines and best practices.

Additionally, implementing strong financial controls is vital to prevent fraud and ensure efficient use of resources.

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