Consultation soon on new public benefit accounting standard

Accounting Standards Board hopes to agree a draft next month

Consultation expected on accounting standard for public benefit entities
Consultation expected on accounting standard for public benefit entities

A consultation on a new accounting standard for public benefit entities will be launched in late February or early March, according to the Accounting Standards Board.

Joanna Spencer, project director at the ASB, said it hoped to agree a draft of the new standard, which will cover universities, social landlords, charities and other not-for-profit organisations, at a meeting on 17 February.

The draft will then be published for consultation towards the end of February, she said.

The PBE standard will form part of a larger financial reporting standard for small and medium-sized organisations, or FRSSME, which is one part of new accounting requirements drawn up to align generally accepted accounting principles in the UK with international financial reporting standards.

Once the PBE standard is finalised, a revised statement of recommended practice for charities will be prepared. It will be based on the PBE standard but will contain more detailed information on charity-specific issues.

The ASB had originally hoped to run the consultation over the same period as an ongoing consultation into the FRSSME, which finishes in April, Spencer said.

However, the PBE standard consultation, which is expected to last for between three and six months, will now start and finish later.

The PBE standard consultation will look at issues including:

  • How to measure the value in the use of assets that are held to provide services rather than cashflow
  • How to value "heritage assets", which include rare and unique assets that are unlikely to be sold
  • How to account for income from non-exchange transactions, such as donations, grants and legacies
  • How to account for below-market-value loans
  • How to account for mergers between non-profit organisations
  • How to account for property held for the provision of social benefit
  • How to account for grants and other commitments made over more than one year.

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