Pursuant to Article 88 of the Turkish Commercial Code, KGK is authorized to set financial reporting standards. Within this authority, the institution initiated work to resolve challenges faced by non-profit organizations in Türkiye. Following consultations with relevant institutions and authorities, the draft text has now been released for review.

Non-profit organizations are defined as entities that prioritize social benefit over profit-making, operate with the support of resource providers, and have distinct accounting needs. Accordingly, KAGİ FRS has been designed specifically to meet their financial reporting requirements, differentiating them from commercial enterprises.

What does the new standard aim to achieve?

• Ensuring that founders, members, and contributors can transparently view the organization’s financial position, performance, and management responsibilities,
• Providing a framework aligned with international accounting and reporting practices,
• Establishing uniform practices for transactions specific to non-profit organizations,
• Increasing accountability by requiring annual activity reports alongside financial statements,
• Reporting goals, strategies, and resource utilization in a transparent manner.

KAGİ FRS, consisting of 28 sections, is planned to be finalized and put into effect in 2026. Following the issuance of the standard, sample financial statements and a chart of accounts will also be published.

How will the consultation process work?

The draft text can be accessed here. Feedback and suggestions must be submitted by October 31, 2025, to [email protected] or [email protected].