Adoption of International Non-Profit Accounting Standard (INPAS) in Kenya
The Institute of Certified Public Accountants of Kenya (ICPAK) is a statutory body of accountants established under the Accountants Act Cap 531, with the mandate to develop and regulate the Accountancy Profession in Kenya. The Institute is also a member of the Pan Africa Federation of Accountants (PAFA) and the International Federation of Accountants (IFAC), the umbrella body for the global accountancy profession.
In line with the Accountants Act, the Institute, as the regulator of the Accountancy Profession, is mandated to promote standards of professional competence and practice in Kenya and to guide on the adoption and implementation of Financial Reporting Standards. As a member of IFAC, the Institute ensures compliance with all the Statements of Membership Obligations and, as such, promotes compliance with standards within the practice of members and the country at large. The Institute participates actively in the standards-setting process and provides jurisdictional perspectives that contribute to setting high-quality international standards that enhance the competence of professional accountants while strengthening the worldwide accountancy profession, thereby contributing to strengthened public trust. The Institute participated actively in the development of the International Non-Profit Accounting Standard (INPAS) and hereby issues this guidance on the adoption and use of the INPAS in Kenya.
WHY INPAS? ADDRESSING THE STANDARDS GAP
Non-profit organizations (NPOs) have long operated without a globally accepted accounting standard tailored to their unique operational and reporting needs. Current international standards have notable limitations:
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IFRS Accounting Standards were primarily developed for for-profit entities, focusing on the needs of investors and creditors. They do not adequately address areas such as fund accounting, donor restrictions, or the need for detailed narrative reporting.
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IPSAS (International Public Sector Accounting Standards) cater to government and public sector entities, lacking specificity for the operational, governance, and funding dynamics of civil society organizations and charities.
INPAS: A GLOBAL RESPONSE TO A GLOBAL NEED
To close this critical gap, a global initiative, IFR4NPO, was launched by Humentum, a leading global nonprofit, in partnership with CIPFA (Chartered Institute of Public Finance and Accountancy) in the UK. The initiative followed a highly collaborative and consultative approach, engaging stakeholders from around the world. ICPAK was actively involved in the Technical Advisory and Governance Groups thereby ensuring local jurisdictional specific issues were addressed.
The International Non-Profit Accounting Standard (INPAS) provides a comprehensive framework tailored specifically for non-profit organizations. Key objectives of INPAS include:
- Establishing a globally consistent and comprehensive financial reporting framework for NPOs;
- Standardizing financial statement formats for comparability and transparency
- Improving the accounting treatment of grants, restricted funding, and narrative reporting;
- Enhancing donor confidence, accountability, and sector credibility.
DEVELOPMENT MILESTONES AND LAUNCH
INPAS has been developed through a series of public consultations via three exposure drafts, with the final exposure draft (ED3) closing on 16th September 2024.
On 23 July 2025, the Technical Advisory Group (TAG) approved the final version of INPAS. The official global launch was held on 21 October 2025 in Geneva, Switzerland. This event marks the beginning of INPAS adoption as the international financial reporting standard for NPOs globally.
ADOPTION AND IMPLEMENTATION ROADMAP
Following its publication, the adoption of INPAS will be subject to individual country decisions and regulatory guidance. The standard includes a full transition framework to support phased implementation.
Key Transitional Provisions:
- Transition Period (2 Years): For the first two years following adoption, NPOs may issue financial reports that comply only with the financial statement requirements, rather than the full INPAS standard.
- Narrative Reporting Exemption: A two-year exemption applies to the mandatory Narrative Report requirement. From year three, full compliance will include both financial statements and a narrative report—collectively referred to as the Financial Report.
Narrative reports will be expected to disclose information on:
- Organizational activities and performance
- Risk management
- Governance structures
- Sustainability efforts
ICPAK’S ROLE IN NATIONAL ADOPTION
The Institute has reviewed the final standard and in response to the need for guidance on adoption, ICPAK confirms that the new standard will be adopted in Kenya. ICPAK further requests for feedback on adoption readiness, support and feedback on the proposed timelines by the standard for review and consideration leading to issuance of a detailed INPAS Adoption Roadmap by 1st January 2026.
ICPAK has already conducted several training sessions and workshops on the upcoming standard and will engage with key sector stakeholders and the Public Benefit Organizations Regulatory Authority (PBORA) to roll out a comprehensive sensitization programme from 2026 onwards.
CONCLUSION
The arrival of INPAS signifies a transformative moment in non-profit financial reporting, ensuring consistency, enhancing accountability, and building trust across the global NPO Sector. As a key contributor to this international effort and as the standard setter, ICPAK remains committed to guiding Kenya’s non-profit organizations through the transition and supporting excellence in financial reporting.
The Institute has commenced discussions with the Public Benefit Organisations Regulatory Authority (PBORA) to sensitise the sector and align on the adoption of the standards for effective implementation within the Country.
For further enquiries on financial reporting, interpretations, and adoption of standards and other related technical matters, please reach out to us at ceo@icpak.com and through the Standards & Technical Services Directorate and the Professional Standards Committee of ICPAK on technicalservices@icpak.com.
CPA DR GRACE KAMAU
CHIEF EXECUTIVE OFFICER Â
