Public benefit entities set to get their own accounting standard

Finance | Tania Mason | 8 Nov 2010

The Accounting Standards Board (ASB) has decided to create an accounting standard for charities and other public benefit entities, as part of its work to harmonise UK accounting standards with international ones.

At the end of last month the ASB issued two new ‘exposure drafts’ that outlined its proposals for a new three-tiered approach to UK financial reporting and a new accounting standard based on the international reporting standards for small and medium-sized entities. These proposals are now out for consultation.

According to Ray Jones (pictured), head of accounting policy at the Charity Commission, the future of the Charities Sorp is assured under these proposals. The ASB said there was “clear evidence that the Sorps were highly regarded and had improved the quality of financial reporting in this sector”.

Early next year the ASB is expected to publish a further exposure draft on a ‘high-level’ accounting standard for charities and other public benefit entities. Jones said this signals a “growing recognition of the importance of charity and voluntary sector accounting and reporting” and “aims to set the ground rules for some of the key issues in charity and public benefit accounting”.

“It could address some of the annoying differences between the three public benefit Sorps – for charities, universities and registered social landlords - such as accounting for capital grants,” Jones said. “It might also help resolve some of the long-standing issues in charity accounting, such as accounting for multi-year grant commitments.”

The ASB has indicated that the new framework will apply to accounting periods starting on or after 1 July 2013. Jones said work has now begun on drafting the new ‘modular’ Sorp to fit with this implementation date.

The ASB’s consultation on its new proposals runs until 30 April 2011. Charity finance directors can download the full proposals here.

Directory: Charity Commission

Comments

[Cancel] | Reply to:

Name *

Email *

Organisation

Job Title

Comments *

Verification *

* Please read our Community Standards

Close »

Community Standards

The civilsociety.co.uk community and comments board is intended as a platform for informed and civilised debate.

We hope to encourage a broad range of views, however, there are standards that we expect commentators to uphold. We reserve the right to delete or amend any comments that do not adhere to these standards.

We welcome:

Robust but respectful debate
Strongly held opinions
Intelligent relevant discussion
The sharing of relevant experiences
New participants

We will not publish:

Rude, threatening, offensive, obscene or abusive language, or links to such material
Links to commercial organisations or spam postings. The comments board is not an advertising platform
The posting of contact details for yourself or others
Comments intended for malicious purpose or mindless abuse
Comments purporting to be from another person or organisation under false pretences
Gratuitous criticism, commentary or self-promotion
Any material which breaches copyright or privacy laws, or could be considered libellous
The use of the comments board for the pursuit or extension of personal disputes

Be aware:

Views expressed on the comments board are left at users’ discretion and are in no way views held or supported by Civil Society Media
Comments left by others may not be accurate, do not rely on them as fact
You may be misunderstood - sarcasm and humour can easily be taken out of context, try to be clear

Please:

Enjoy the opportunity to express your opinion and respect the right of others to express theirs
Confine your remarks to issues rather than personalities

Together we can keep our community a polite, respectful and intelligent platform for discussion.