Call to delay new accounting policy

Sector-specific standards should be developed before Accounting Standards Board brings in changes to rules for mid-sized entities, says Charity Finance Directors' Group

Charity Finance Directors' Group
Charity Finance Directors' Group

The Accounting Standards Board must develop sector-specific standards before introducing planned changes to accounting policy, the Charity Finance Directors' Group has warned.

Last week, the ASB closed a consultation into new financial reporting standards for mid-sized entities, a category that includes many charities.

It will consult later this year on a financial reporting standard for public benefit entities, including charities, called Financial Reporting Exposure Draft 45, or Fred 45.

"We strongly recommend that the ASB holds off from finalising the FRSME before responses to the FRSPBE have been received," the CFDG said in its response. "This will avoid difficulties that might arise where issues identified as a result of the consultation on Fred 45 cannot be addressed because of underlying requirements of the FRSME."

The CFDG said it was important that the ASB allowed time for charity regulators to introduce a new sector-specific statement of recommended practice, or Sorp – a specialist set of rules that governs charity accounting – before charities are expected to conform to the new rules.

Nick Brooks, head of not-for-profit at the accountancy firm Kingston Smith and chair of the Charity and Voluntary Sector Special Interest Group at the Institute of Chartered Accountants in England and Wales, both of which responded to the consultation, said he also believed the Sorp should be introduced early enough to allow charities time to study the new rules.

"One encouraging thing is that the ASB seems to recognise this," he said. "It seems to accept that it's better to let the schedule slip a bit if necessary."

An ASB spokesman said the board would not comment on individual responses to consultations at this stage.

Have you registered with us yet?

Register now to enjoy more articles and free email bulletins

Register
Already registered?
Sign in

Before commenting please read our rules for commenting on articles.

If you see a comment you find offensive, you can flag it as inappropriate. In the top right-hand corner of an individual comment, you will see 'flag as inappropriate'. Clicking this prompts us to review the comment. For further information see our rules for commenting on articles.

comments powered by Disqus