The Accounting Standards Board (ASB) has made changes to its proposed accounting framework, promising amendments to the FRSME, removing the requirement for certain charities to report under tier 1, and delaying the deadline for compliance.
Following a board meeting on 16 June which considered responses to its consultation on FRED 43 and 44, the ASB decided that it would change its approach to the FRSME (Financial Reporting Standard for Mid-Sized Entities).
Speaking to civilsociety.co.uk, ASB policy director Jennifer Guest confirmed that while previously the strategy had been to make minimal changes to the FRSME, amendments will now be made to provide options more in line with those in the IFRS (International Financial Reporting Standards).
“Some organisations were quite aggrieved that some of the options weren’t available in the FRSME but were available in the full IFRS, so the board has decided to put some of the options back in.
“So it is making more changes to the FRSME but it is more in line with tier 1. The extra options are more in line with the options available in UK GAAP at the moment.”
The effective date for the changes has now been put back by six months to 1 January 2014, to allow time for the creation of a new exposure draft of the FRSME.
The FRSPBE (Financial Reporting Standard for Public Benefit Entities), which provides clarification on how not-for-profit entities should comply with this framework, remains out for consultation.
Tier 1 removed
Meanwhile, the removal of the requirement for so-called publicly-accountable entities to report under tier 1 means organisations such as CAF and the Wellcome Trust will be able to report on the same basis as the majority of large and medium-sized charities.
Because they hold listed debt or hold money in a fiduciary capacity, they would previously have had to report under tier 1, the most onerous regime designed for publicly-listed companies.
This change appears to signal a move to a two-tier framework.
Referring to consultation responses, Guest said: “It’s fair to say that although there was some support for the tiered structure, it was mainly from organisations that weren’t affected.
“Entities who were affected and falling in tier 1 were expressing some disquiet.”
