The Accounting Standards Board has published its proposals for how public benefit entities should account for sector-specific transactions in the new Financial Reporting Standard for Medium-Size Entities.
The proposals are contained in a document known as Fred 45 – Financial Reporting Exposure Draft 45 - and once agreed they will be included in the new financial reporting standard for charities and other organisations that exist for the public benefit. This sector-specific standard will exist alongside the generic standard mentioned above.
This standard is being devised because generic international accounting standards are written for the commercial sector and do not address some transactions that are specific to public benefit entities.
The new proposals now out for consultation by the ASB address various issues including:
- Concessionary loans
- Property held for the provision of social benefits
- Entity combinations
- Impairment of assets
- Funding commitments; and
- Incoming resources from non-exchange transactions (donations etc).
Roger Marshall, chairman of the ASB, said many of the proposals mirror the requirements in the existing Sorp “and are therefore consistent with current practice”. The draft also seeks to reinstate the requirements of FRS 30 ‘Heritage Assets’ into the standard.
The consultation will run until 31 July 2011 and the ASB is planning that the new public benefit entities standard will take effect at the same time as the new generic accounting standard – for annual reporting periods beginning on or after 1 July 2013. The consultation on the draft generic standard closes on 30 April 2011.
