Accounting Standards Board reconsiders proposed rule changes

Plans to adapt the rules on accounting for property and borrowing costs might not now be introduced, it says

Accounting Standards Board
Accounting Standards Board

The Accounting Standards Board has announced a "tentative" decision not to make changes to accounting rules that the sector considers would make life more difficult for charities.

In a short document published after a board meeting on 16 June, the ASB suggested it would continue to allow organisations to use accounting principles set out in the existing rules.

The board met to consider the results of a consultation into the proposed Financial Reporting Standard for Mid-Sized Entities, which would affect all organisations not publicly listed, but with turnovers of more than £6.5m.

The standard was due to be introduced on 1 July 2013 and would have brought in changes to the way in which property and borrowing costs are accounted for. The FRSME might not now be introduced, and any changes will not come into effect until 1 January 2014, the ASB said.

Pesh Framjee, head of not-for-profit at the accountancy firm Crowe Clark Whitehill, said the ASB's change of heart meant charities would continue to be able to revalue property and write off borrowing costs over a number of years, both of which many charities currently do, but which would not have been allowed under proposals in an ASB consultation that closed earlier this year.

Framjee said the ASB's change of heart might also mean that charities would not have to value all the stock in their shops at the time it was donated, rather than when it was sold – a contentious proposal in an ongoing consultation.

The ASB also said charities would not have to file accounts using a complex framework designed for large public companies.

Previous rules would have meant that charities holding listed debt, or which held a banking licence, would be included in the list of 'tier-one entities' that have to use the more complex full International Financial Reporting Standards.

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