There was a time when a not-for-profit organization was just a not for-profit organization. Not anymore! When Canadian accounting standard setters developed new accounting standards for not-for-profit organizations (NPO’s) they created two categories of NPOs: private sector NPOs and government sector NPOs. Determining the category that applies your organization is important since it establishes the accounting framework the organization can adopt (the frameworks are outlined in the table below). 
The key difference is that government sector NPO’s financial and operating policies are controlled by the government. Generally a government sector NPO is:
- a component of a government reporting entity (federal, provincial, territorial or municipal governments); and
- its financial statements are usually consolidated within the financial statements of the controlling government reporting entity.
It is important to note that just because an organization receives 100% of its funding from the government, does not in itself constitute control. Your organization may be financially dependent on the government, but your organization’s governing body may make independent decisions regarding its financial and operating policies. If you have any doubt as to your organization’s status or the implications of adopting a particular framework, please contact Christa Casey at: ccasey@welchllp.com.
