The Future of Accounting for 'Public Benefit Enitities' - Briefing paper released by CFDG
29th June 2011
CFDG has today released a briefing paper outlining the key proposals for an accounting standard for Public Benefit Entities (PBEs) being consulted on by the Accounting Standards Board (ASB) in Financial Reporting Exposure Draft 45 (FRED 45).
The briefing paper concentrates on where the new standard will give rise to changes in the way that charities are required to report. The proposed FRSPBE covers a range of topics which are of particular relevance to PBEs. These include concessionary loans, mergers, funding commitments and accounting for non-exchange transactions, or donated goods. The proposed accounting standard will come into play alongside the FRSME which will be implemented as part of the ASB’s plans to converge with International Financial Reporting Standards.
The issue of how to account for donated goods is specifically highlighted as a key issue in this briefing paper; Caron Bradshaw, CEO of CFDG says “many organisations that receive donated goods for sale, such as those running charity shops, will under new proposals need to start valuing these items as soon as they are brought in. This will have huge practical implications and could also lead to increased costs in terms of stock taking and external auditing. The SORP will have to interpret these standards. It is therefore essential that charities take notice of this consultation document from the ASB and raise their concerns now.”
CFDG have listed a number of questions for charities throughout the briefing paper and urge members and others in the sector to respond to those relevant to them by 12th July.
Caron Bradshaw added, “the ASB has so far taken on board the concerns of the PBE sector. The social housing sector mounted a huge response to the FRSME consultation earlier in the year highlighting the issues around not being able to revalue fixed assets. Many of the issues raised by CFDG in our response to the previous consultation appear to have been taken on board. Charities that are likely to be impacted by any of the proposed provisions in the FRSPBE, such as those with charity shops, should come forward now.”
- Ends -
Notes to Editors:
1. CFDG is the charity that champions best practice in finance management in the voluntary sector. Our training and development programmes enable finance managers to give the essential leadership on finance strategy and management that their charities need. With more than 1,700 members, managing over £21bn, we are uniquely placed to challenge regulation which threatens the effective use of charity funds. For more information, please see www.cfdg.org.uk
2. The full briefing paper can be found here. To discuss the paper please contact CFDG Policy Officer Katherine Smithson at firstname.lastname@example.org or on 0207 250 8347.