Charity shops should not have to value goods, says CFDG

Charity Finance Directors' Group tells Accounting Standards Board consultation this would add to red tape burden on charities

Charity shop stock
Charity shop stock
The Accounting Standards Board should scrap proposals that would require charity shops to value donated goods, according to the Charity Finance Directors’ Group.

In a consultation on a new financial reporting standard for public benefit entities, including charities, housing associations and universities, the ASB suggested charities should have to record on their balance sheets the value of donated goods that have not yet been sold.

Under existing rules, charities do not have to account for the value of unsold stock.

In response to the consultation, which closed last week, the CFDG said: "There are very strong concerns among charities regarding the impact that this will have both on the time and costs of running these businesses.

"This type of additional bureaucracy for little overall benefit is inconsistent with the government’s priority to cut red tape."

The CFDG said the ASB should maintain the existing rules.

The public benefit entity standard will be a higher-level document than the main charity accounting rules, the Statement of Recommended Practice.

It is being introduced as part of a process to bring UK accounting into line with international financial reporting standards, and will sit alongside new standards for small and medium-sized entities.

Pesh Framjee, head of charities at Crowe Clark Whitehill and a member of the committee that will develop a new Statement of Recommended Practice for the voluntary sector, said he would prefer it if the key points of public benefit entity accounting were included in the main standard.

"Consideration needs to be given to reducing the number of documents that have to be read," he said.

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