RPC 21 applies to public interest non-profit organizations
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Swiss GAAP RPC 21: A Must-Have for Swiss Foundations
Discover Swiss GAAP FER 21, the benchmark for foundations and non-profit organizations in Switzerland, ensuring transparency, compliance, and donor confidence.
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Introduction
Foundations and non-profit organizations (NPOs) face a major challenge of transparency and reliability in their accounts. Swiss GAAP RPC 21 has established itself as the reference standard for presenting the accounts of these organizations. Here’s the essential information your foundation needs to know.
Why Adopt Swiss GAAP RPC?
The main objective of Swiss GAAP is to provide a true and fair view of assets, financial position, and results, while respecting the principle of “true and fair view.” Their development aims to improve the comparability and quality of financial information in Switzerland, while aligning national practices more closely with international standards.
Who Is RPC 21 For?
The standard is specifically intended for public-benefit, non-profit organizations such as foundations, associations, and other entities with social, charitable, cultural, or scientific purposes, without any profit motive
Fundamental Principles
Foundations must structure their financial statements by presenting:
- a detailed balance sheet: assets and liabilities
- an income statement: income and expenses
- a cash flow statement: changes in liquidity during the year
- a statement of changes in equity: evolution of the organization’s own resources
- a management report: qualitative and quantitative analysis of activities
The standard requires increased transparency. Each accounting principle applied must be disclosed, and valuation methods must be explained. Information on related-party transactions as well as details of compensation for governing bodies must be included in the notes to the annual accounts.
The use and management of restricted funds, such as donations dedicated to a specific project, must be presented separately and clearly documented. In addition, changes in these funds must be tracked in a specific statement to ensure resource traceability.
Financial statements must be reliable and comparable year over year. They must be clear and understandable for stakeholders (donors, authorities, partners). Finally, they must be prepared according to the fundamental principles of consistency of methods and prudence, ensuring stability and the security of financial information.
The total amount of compensation paid to members of the management and governing body must be disclosed in the notes, reinforcing transparency. This allows stakeholders to have clear information on the use of the foundation’s resources. Furthermore, the remuneration of the chairperson of the governing body must be documented separately, further enhancing transparency in the organization’s governance.
The annual report must include, beyond financial aspects, an analysis of the effectiveness of the activities carried out by the organization. It serves to demonstrate to what extent resources are used in line with the foundation’s social mission, as well as to assess the impact of actions undertaken during the year.
Regarding fund management, the standard requires that the foundation define reserve objectives, justified by specific quantitative indicators. These objectives, guaranteeing the sustainability of the organization, help anticipate future needs. The foundation must justify any deviation from the recommended capital ratios, generally set between 11% and 25% of the annual budget, in its financial statements or management report. This approach ensures responsible and prudent resource management.
Compliance and Publication of Financial Statements
The financial statements of foundations must be audited and approved in accordance with the requirements of Swiss GAAP RPC 21. These documents must be published in digital format and made accessible to the public within six months after the year-end. They must be hosted on the organization’s website, ensuring free and transparent access to financial information for all stakeholders.
Recent Developments in the Standard
The revision of the standard in 2016 clarified its integration into the Swiss accounting ecosystem. By setting clear thresholds, it also defined the obligations of smaller entities. A foundation may apply only the fundamental RPC standards if, for two consecutive years, it does not exceed two of the following criteria: total balance sheet less than CHF 10 million, revenue less than CHF 20 million, or an average staff of fewer than 50 full-time equivalents. These adjustments maintain the level of rigor for smaller organizations while facilitating the application of the recommendations.
Benefits of RPC 21 for Your Foundation
Adopting RPC 21 strengthens the confidence of donors, partners, and supervisory authorities. It reduces the risk of regulatory or tax non-compliance, and improves internal management thanks to a clear and structured view of finances. It also facilitates comparison with other organizations in the sector.
Conclusion
Adopting Swiss GAAP RPC means choosing transparent and exemplary management that meets the expectations of stakeholders in the non-profit sector. At Fiduciaire Genevoise, we will support you in implementing these recommendations—from analyzing your needs to preparing your financial statements and annual reports. Do not hesitate to contact us for tailored support in full compliance with Swiss GAAP RPC.
To go even further, consult the official Swiss GAAP RPC manual or contact our specialized team.
Élodie Rochat
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