First draft of new charity accounting rules could be published by end of the year

Accounting Standards Board reveals timetable for change

The Accounting Standards Board hopes to present the first draft of a new accounting regime for charities and other public benefit entities by the end of the year.

The rules will be drawn up as part of the process of bringing the UK's accounting regulations in line with new International Financial Reporting Standards.

Andrew Lennard, chair of the ASB's Committee for Accounting for Public Benefit Entities, which sets the relevant standard and is also known as Cape, said he expected the document to act as an extension of the standard for small and medium enterprises, which is expected to be released this autumn.

"We envisage that this will look at about eight topics that are particularly difficult for public benefit entities," he said. "This will include rules for non-reciprocal transactions, such as grants or donations, and liabilities such as multi-year grants. Earlier this year we consulted on what we thought the major issues were, and the response from the sector indicated we were on the right track."

Ray Jones, policy accountant at the Charity Commission and an observer member of the Cape committee, said it was expected that the ASB would support the continued existence of a Statement of Recommended Practice for charities, based on the new standard. Some accountants fear the ASB's plans might not include a charity Sorp. "Once the ASB produces its draft, we will be able to consult on the future of the Sorp," Jones said. "I hope we can do a lot of work on the Sorp while the ASB is developing the draft PBE standard, as we are being kept abreast of what is going on."

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