RegulationAccounting StandardsASB policy change gives art galleries the brush-off

ASB policy change gives art galleries the brush-off

Standards board rolls out proposals to hold institutions to stricter requirements, demanding assets be reported at current valuation 

The Accounting Standards
Board
 has issued an exposure draft today that will force museums and
galleries holding public collections to report their assets at valuation.

ASB chiefs launched the The Financial Reporting Exposure Draft 40 in efforts
to improve the quality of the financial reporting of heritage assets, focussing
on groups such as
museums
holding collections of art, antiques and books, and also entities that own and
manage landscape or buildings for their environmental or historical qualities.

FRED 40 require entities, wherever practical, to report collections of
heritage assets at valuation in their annual accounts instead of the current
requirement of FRS 15 – ‘Tangible fixed assets’. FRS 15 presently sees most
bodies only recognising
recently acquired heritage assets in balance sheets at cost – which may bear
little or no resemblance to the organisation’s collection as a whole.

If a valuation is not practical, the ASB called for collections to be kept
off the balance sheet. However, enhanced disclosures are required regardless of
whether or not collections are reported in the balance sheet, it said.

Announcing the issue of FRED 40, ASB chairman Ian Mackintosh said: ‘Without
their collections, entities such as museums and galleries simply could not
function. In the ASB’s view, the best financial reporting of these heritage
assets is secured by reporting them at current valuation.’ 

Comments to the ASB on FRED 40 are requested by 20 April 2007.

Related links:

ASB vote will cause shake-up for
pensions

In the frame: accounting frameworks 

ASB chair rejects IFRS labelling as
‘rogues’ charter’

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