CFG outlines residual issues with new accounting proposals

 

The Charity Finance Group (CFG) has submitted its response to the Accounting Standards Board (ASB) on the latest of a series of consultations on the future of financial reporting in the UK and Republic of Ireland. 

Here’s the press release:

This process is moving UK accounting practice in line with international standards. 

Over the past two years CFG, along with members and participants in the CFG Technical Accounting Forum, has worked with the ASB to ensure that the new accounting framework is fit for purpose and that charities are not faced with a nasty surprise when implemented in 2015. 

Caron Bradshaw, CEO at CFG, said: “This has been a long journey but when it comes to having a final version of the new overarching standard we’re nearly there – an exciting step which will reduce UK accounting principles from a convoluted 5000 page document to something in the area of 400 pages. There are however, some rather confused drafting issues which still need ironing out if this is going to be a smooth transition for the charity sector.”

Caron addressed some of the main concerns with the current proposals “As with all technical pieces of work, the devil is in the detail with this one. Some of the definitions used by the ASB, such as those of a ‘performance condition’ and a ‘restriction’, will actually significantly transform the look of charity balance sheets.  It is important that the ASB take these residual concerns on board and make the recommended changes so that charity accounting is kept relatively consistent and that the accounts reflect a true and fair view of charities’ financial position.  If this is not taken into hand the impact of the changes will be quite serious”

CFG has outlined a number of recommendations for the ASB which can be found in their official response. CFG will also be contributing to future consultations on the new Charities SORP and on the future of the FRSSE, a cut down version of the current UK standards which will remain in place for smaller organisations. 

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