Industry issues

FRS 30 Heritage Assets 
The Accounting Standards Board has issued 'FRS 30 Heritage assets' which introduces some significant new disclosure requirements for reporting the content and value of collections.  Heritage assets can have historical, artistic, scientific, geophysical or environmental qualities so this will be of particular relevance to many charities.

The main features of FRS 30 are as follows:

  • The disclosures should apply to all entities that hold heritage assets, regardless of whether these assets are reported in the balance sheet. These disclosures will provide information about an entity's total holding of heritage assets and the entity's stewardship of these assets.
  • The disclosures should make clear the accounting policies adopted for an entity's holding of heritage assets and the extent to which these assets are recognised in the balance sheet. The disclosures should provide readers with an understanding of the asset values being reported as well as the entity's policies for managing its total holding of heritage assets.
  • The accounting in respect of the recognition and measurement of heritage assets should follow the requirements of FRS 15, as supplemented by the requirements of FRS 30.
  • To encourage a valuation approach, FRS 30 allows entities to use internal valuations without the need for a full valuation every five years.

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Managing in a Downturn 
Ian Oakley-Smith, a director in PwC's Business Recovery Services, worked with the Institute of Fundraising, the Charity Finance Directors' Group and the Association of Charitable Foundations to produce 'Managing in a Downturn - an update of expectations 6 months on'.  This document updates the results of the November 2008 survey of over 350 charities regarding their expectations of the impact of the economic downturn for the year ahead.

Public Benefit 
The Charity Commission has performed several 'public benefit assessments' on a variety of charity organisations, including independent schools, care home charities and charities for the advancement of religion.  These assessments include consideration of whether the charity meets the public benefit requirement and operates for public benefit.

The assessment reports are available at www.charitycommission.gov.uk/Charity_requirements_guidance/Charity_essentials/Public_benefit/pbassessreports.aspx.

Based on their findings from these assessments, the Charity Commission have issued some general points of interest and initial observations - this is available at www.charitycommission.gov.uk/Charity_requirements_guidance/Charity_essentials/Public_benefit/assessemerge.aspx. A further report was pulished on March 2011.

In addition, the Charity Commission has published new guidance, based around an example report for a fictional arts centre, to help trustees of arts charities meet the new requirement to report on public benefit in their annual report and accounts. More information is available on their website at www.charitycommission.gov.uk/Charity_requirements_guidance/Charity_essentials/Public_benefit/pbsummary.aspx

Charities more positive about the future 

Charities are increasingly positive about the future despite feeling the effects of the recession, the Charity Commission's latest Economic Survey of Charities has revealed.

Fifty-six per cent of the 1,001 charities polled said they were being affected by the downturn, up from 52 per cent when the last survey was carried out in March.

Since March, the perceptions of charities with annual incomes of £1m or more had undergone the greatest change: 83 per cent said they were affected, compared with 46 per cent in March.  But only one in three of the largest charities is worried about the coming six months, down from 64 per cent earlier in the year.  The increasing impact of the recession has also led to 52 per cent of charities taking steps to combat the effects of the recession, up by 20 percentage points.

Other sector news 

Reclamation period for Gift Aid cut to four years

HM Revenue & Customs has confirmed that the amount of time that charities have to reclaim Gift Aid on donations will fall by two years from April 2010. The rules currently allow charities to submit claims on donations made up to six years previously, but this is to be reduced to four years from 1 April next year. The change is part of a review intended to create a single regime for all direct taxes and w as not targeted specifically at charities. As a result, charities need to check they have reclaimed all the Gift Aid to which they are entitled.

No time to turn taps off, say trusts and foundations

The Charity Commission conducted interviews with 19 of the largest grant makers during April 2009 who gave clear indication that levels of grant-making are being sustained despite the recession.