The Accounting Standards Board looks set to amend its proposed new reporting requirements for public benefit entities so that charities will only have to account for goods donated to charity shops once they are sold.

At a meeting on 20 October, the ASB “tentatively agreed” with submissions from CFDG and others regarding how donated stock and incoming resources from non-exchange transactions should be measured.

The ASB had proposed, as part of the new accounting standard for public benefit entities (FRSPBE), that charities should make estimations of stock value for goods donated to their shops.

But CFDG objected to the idea, questioning the usefulness of such information given that the stock has no replacement cost and therefore no value to the charity until sold.

After the meeting last week, the ASB issued a statement that said: “The board tentatively agreed that incoming resources from non-exchange transactions should only be recognised when the resource (ie donated goods) can be measured reliably, and where consideration is given to the benefits and costs.

“Consequently, where it is not practical to estimate the value of donated goods with sufficient reliability or benefit the income is recognised when the donated goods are sold.”

Jane Tully, head of policy and public affairs at CFDG said: “The wording of this ‘tentative’ decision is promising as it reflects the two main elements of the CFDG argument against the original proposals. These are the fundamental issues of practicality and reliability of such estimations of value, and importantly, significant doubts over the usefulness of such information to the users of accounts.

“We hope that the wording we see in the next draft of the standards continues to reflect this perspective and does not place unnecessary bureaucracy on charities that receive such donations.”