The balance sheet is like a "snapshot" of your association's finances, clearly showing its situation at a given point in time. It's an invaluable tool for assessing the value of your association's assets and liabilities, and can play a decisive role in grant applications and more. However, it is important to note that not all associations are required to produce one.
So, to keep on top of the deadlines for preparing and drawing up your association's financial statements, let's ask ourselves the question: when do we actually have to do it?
Which associations are concerned?
The world of accounting can seem a little complex, especially when it comes to associations. Unlike companies, the rules for associations are more flexible. Indeed, the 1901 law governing them leaves them free to decide whether or not they need to draw up a balance sheet. For most, it's a choice, not an obligation.
But there are times when you need to fully embrace the accounting process and file your annual financial statements. Here's when it becomes necessary:
- If subsidies reach 153,000 euros or more,
- If your balance sheet exceeds 3,100,000 euros and/or your sales exceed 1,550,000 euros, and/or you have more than 50 employees,
- If your public funding exceeds 50% or exceeds 75,000 euros,
- If you are recognized as a charitable organization or have obtained accreditation,
- If you have the role of financing election campaigns,
- If you appeal to public generosity,
- If you manage establishments in the health and social sector,
- If you are a sports association,
- If your objectives involve assistance, charity, scientific or medical research,
- If you mix profit-making activities with commercial taxes.
Although accounting is not always necessary, it can be a valuable ally. It enables association managers to track the progress of their projects over the years, and check that everything is working as it should. In addition, it promotes transparency vis-à-vis members and demonstrates the association's profitability to the authorities (for grant applications) or third parties such as banks and suppliers.
How does an association's balance sheet look?
Associations with accounting obligations must present the balance sheet according to the new association chart of accounts in force since January 2020.
The balance sheet is made up of two columns: assets on the left and liabilities on the right. Assets include everything the association owns. These may be tangible assets (equipment, tools, buildings, etc.), intangible assets (concessions, patents, etc.) or current assets (inventories, receivables, cash in hand and in the bank, etc.). Liabilities describe the source of the resources that enable the structure to have these assets. These are debts (purchases on credit from suppliers, loans, etc.) and contributions (members' contributions, subsidies, donations, previous profits, earnings for the year, etc.).
The financial balance sheet is similar to the accounting balance sheet, and includes the same information, but with an additional parameter: maturity. It shows when assets will be liquid and liabilities due. This is the version preferred by financial partners, as they can quickly analyze the organization's solvency, i.e. its ability to pay its debts with what it has.
Cash accounting is sufficient to draw up a balance sheet. This is the case when the association has no assets other than the money in the bank account and cash on hand. On the assets side, you'll find the balance of the bank account and the cash balance, and on the liabilities side, any surplus from previous years and the profit for the year.
You can find a balance sheet template to download or complete online at impots.gouv.fr. Specialized software packages also provide customized documents for each association. The balance sheet is automatically produced in compliance with current standards.
When should you draw up your balance sheet?
You may be wondering how often an association draws up its accounting and financial statements. Well, it's a bit like for a company: every year, at the end of the financial year. At this time, the income statement and notes are also drawn up, to give a complete overview of the financial situation.
The dates of the financial year are not necessarily based on the calendar year, although this is often more practical. In general, the financial year ends on December 31. The financial year normally lasts 12 months, except for the first and last balance sheets in the event of cessation of activity.
There are, however, some associations that have to comply with statutory deadlines. For example, hunting federations, human services associations and those receiving subsidies have specific deadlines to meet.