CIPFA - Panels - Accounting and Auditing Standards Panel

Home > Panels > Technical Panel Websites > Accounting & Auditing Panel > Round Table

CIPFA round table on future of UK GAAP for public benefit entities

27 November 2009
Bishop Partridge Hall, Church House, London

On 27 November 2009, CIPFA held a round table event to discuss the Accounting Standards Board (ASB) consultation paper on the future of UK GAAP. The ASB paper is the most recent in a series of ASB consultations on how UK standards frameworks should converge or move to ones mainly based on IFRS or other IASB standards.

The principal focus of the Round Table were the proposals for public benefit entities outside the public sector. These bodies are not well served by IFRS. Nor are they provided with additional guidance such as is available to public sector bodies in the Government Financial Reporting Manual (FReM) and related manuals and codes reviewed by the Financial Reporting Advisory Board.

The event was chaired by Martin Sinclair (chair of CIPFA’s Accounting and Auditing Standards Panel), and presentations were provided by

Ian Mackintosh, Chair of the Accounting Standards Board
Chris Harris, CIPFA’s Resource Director and a member of CIPFA’s Charities Panel.
Sarah Sheen, an independent consultant with a longstanding involvement in the Further and Higher Education Sector, and formerly PwC’s national technical manager for tertiary education issues
Jane Harrison, Assurance Director in Grant Thornton's housing sector practice and provider of technical support to the housing team and clients, nationally.

Attendees included preparers, auditors, standard setters and regulators from charities, further and higher education, and RSL sectors.

The event was very interesting and informative and discussion ranged across matters discussed in other ASB consultations and some new issues, and key comments and views were as follows:

There is a gap in international standard setting. Unlike the companies sector and the public sector which have international standards available to them, PBEs have no readily applicable standards available which have international status. ASB development in this area would be extremely helpful, although ultimately it might be better if the gap was filled by an international body.

Accountability. There was a general accord that, while it would be ridiculous to suggest that PBEs are not accountable, the IASB definition of accountability and the consequent view of user requirements have a deeply embedded profit-seeking context. It should not be automatically assumed that the requirements for profit seeking accountable entities are the same as PBEs.

Support for a Public Benefit Standard. In line with the above, there was support for a public benefit standard.

IFRS for SMEs. The streamlined approach in the IFRS for SMEs might be a better starting point for development of IASB based standards for PBEs.

Interpretation. Any public sector standard and related guidance would need to reinterpret IASB standards to address sector specific issues such as wider concepts of economic activity. For example, to reflect expenditure discharged and assets obtained for the purpose of providing services to the public.

Adaptation. On some matters, adaptation of IASB standards is expected to be required, rather than re-articulation in line with wider concepts.

ASB have identified the key issues for PBEs. There was general agreement over the list of issues, although some clarifications or additional items might be suggested.

The feedback from this event and discussions with CIPFA’s Accounting and Auditing Standards Panel, Charities Panel, FEHE Panel and RSL Panel were used to develop the CIPFA response to the ASB paper, which is available here.