Accounting rules 'may be harmful'

Charity assets could end up listed on the balance sheets of public sector organisations under new international accounting standards being adopted in the UK.

A proposal under the International Public Sector Accounting Standard 6, being introduced over the next year, is that councils and primary care trusts would be deemed to have 'control' of a charity where they could appoint or dismiss the majority of trustees and would therefore have to list its assets on their balance sheets.

The change could affect trust in charities, according to Ray Jones, head of accountancy policy at the Charity Commission. He said charities could feel pressured to be subsumed by public bodies and the line between donations and government money could be blurred.

He said consultation was required to ensure charities received the right treatment.

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