Guide to Audit Research Information

Refers to the end date of a one-year accounting period. For newly established organizations, or organizations that may have later changed their official financial year end date, this period may be longer or shorter than 12 months. Most charities have a financial year end date of either 31 March or 31 December.

Refers to a member of the board of people that oversees the affairs of a charity. The directors are sometimes interchangeably referred to as either of the following: “members of executive committee”, “councillors”, “governors”.

There are a total of 4 different organziational types of tax-exempt charities in Hong Kong. These are:

• Company limited by guarantee under the Companies Ordinance
• Trust
• Society registered under the Societies Ordinance
• Statutory body incorporated under a specific Ordinance

There are a plethora of potential income items that a charity may have. However, one item that is consistent in audited financial statements across the industry is the specified amount of donation received.

This refers to (usually large-scale) specific funding received from the Social Welfare Department’s Lump Sum Grant Subvention System (LSGSS), which has been implemented since 1 January 2001.  As at 31 March 2021, 164 NGOs were funded under the LSGSS. In the charity directory, all subvented charitable organizations have been labelled with the subvention status. For specific data about subvention funding, you may also refer to our NGO Subvention Allocation Breakdown analytics.

Total income, sometimes called as revenue, refers to gross income/profit and is located primarily in the Income Statement of a respective charity’s financial statements. Due to the large number of different income items that may comprise the total income, we only report on the sub-items that are consistent across the industry, which is donation income and whether the charity is receiving subvention funding from the Social Welfare Department. If you wish to see the detailed breakdown of income for a respective charity, please refer to the audit document shared on the charity directory listing.

As the name implies, this refers to the total expenditure incurred by the charity during the period specified in its financial statements. Due to the vast difference that each organization would report its expenses, only total expenses is being reported on. If you wish to see a more detailed view of expenses, please refer to the audited financial statement shared in the charity directory listing.

This refers to “Total Income” minus “Total Expenditure”.

Also called “Net Assets”. Refers to “Total Assets” minus “Total Liabilities”.

Non-current assets refer to a charity’s long-term investments that are not easily converted to cash or are not expected to become cash within an accounting year.

Current assets refer to a charity’s short-term investments that are easily converted to cash. Current assets include cash, bank account, cash equivalents, accounts receivable, etc.

This refers to whether a charity has paid any remuneration to its directors.  This shall generally not occur (as it is not legal by law, unless proper exemption) and usually this should therefore be a value of “0 HKD”.

Total Assets equals “Total Non-Current Assets” plus “Total Current Assets”

Non-current liabilities include: debentures, long-term loans, bonds payable, deferred tax liabilities, long-term lease obligations, and pension benefit obligations. They are generally not that common on a charity’s audit statements but may occur.

Current liabilities are a company’s short-term financial obligations that are due within one year or within a normal operating cycle.

Net Current Assets equals “Total Current Assets” minus “Total Current Liabilities”.

Total Liabilities equals “Total Current Liabilities” plus “Total Non-Current Liabilities”. 

The Liabilities to Assets Ratio is determined by “Total Liabilities” divided by “Total Assets”.

The Working Capital Ratio equals “Net Current Assets” divided by “Total Expenditure”. The ratio determines how long (in years) a charity could sustain its level of spending using its net current assets, or working capital, as reported on its most recently filed audit. Dividing the net available assets in the most recent year by a charity’s total expenses, yields the working capital ratio. In the future we will aim to calculate the charity’s average total expenses over its three most recent fiscal years as opposed to only the total expenses from its current year.

While we may report more detailed metrics in the future, this will currently indicate a “Yes”/”No” as to whether the charity has any outstanding amount due to one of its directors or members. You may refer to the charity’s financial statements for more details.