Accounting Standards Board to reconsider plans to change donated stock rule

Accountants complained that forcing charities to value goods on receipt would cost the sector too much time and money

Charity shop stock
Charity shop stock

The Accounting Standards Board has promised to look again at a proposed rule change that would force charities to value donated goods, including charity shop stock, as soon as they were received.

Charity accountants have been highly critical of the proposed change, which they say would achieve little and cost the sector a lot of time and money.

The proposal appeared in a consultation on a new financial reporting standard for public benefit entities, including charities, housing associations and universities. Known known as the FRSPBE, it is part of a larger revision of accounting rules to make them compatible with international financial reporting standards.

The ASB has also abandoned plans to publish the FRSPBE as a separate document, and said it would instead be included in the main financial reporting standard for medium-sized entities – a more general set of guidelines that will cover businesses as well as charities.

Katherine Smithson, policy officer at the Charity Finance Directors’ Group, said both decisions were good ones.

"They haven’t finally decided to abandon the idea of valuing donated goods, but they’ve been very flexible at withdrawing from other proposals when people have protested, so it’s encouraging they’re looking at it again," she said.

Smithson said the ASB had already decided it would consult again on its main standard, and she expected it to reconsult on the FRSPBE as part of that process.

"We would hope that’s the decision they take," she said.

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