The Accounting Standards Board (ASB) has today issued an Interpretation for Public Benefit Entities of its Statement of Principles for Financial Reporting. The Interpretation explains how the principles in the Statement apply for public benefit entities.

The Interpretation will support the work of those bodies within the public benefit sector that are recognised by the ASB for the purpose of issuing Statements of Recommended Practice (SORPs). It will also be of interest to international work, including the conceptual framework project that is being taken forward by the International Public Sector Accounting Standards Board.

Announcing the publication of the Interpretation, ASB Chairman, Ian Mackintosh said:

“It is important that the principles of financial reporting are expressed so as to be easily applied to the public benefit sector, especially given its significance to the UK economy. This Interpretation will be of widespread interest internationally as well as in the UK. The ASB is grateful to members of the Board’s Committee on Accounting for Public-benefit Entities (CAPE) for their contribution to this project.”

1. The ASB’s “Statement of Principles for Financial Reporting” sets out the principles that the ASB believe should underlie the preparation and presentation of general purpose financial statements. The Interpretation for Public Benefit Entities is based upon an Exposure Draft that was published in August 2005 and was generally well received. Appendix 4 of the Interpretation explains the Board’s deliberations on the issues raised by respondents to the Exposure Draft and the changes that have been made.
2. Public benefit entities are reporting entities whose primary objective is to provide goods or services for the general public or social benefit and where any risk capital has been provided with a view to supporting that primary objective rather than with a view to providing a financial return to equity shareholders.
3. The Committee on Accounting for Public-benefit Entities (CAPE) is one of two specialist committees that advises the ASB on proposals for Statements of Recommended Practice (SORPs) put forward by specialist bodies developing accounting practice for their sector. CAPE also advises the ASB generally on matters relating to public benefit and similar entities.
4. The ASB is an operating board of the Financial Reporting Council (FRC), the UK’s independent regulator responsible for promoting confidence in corporate reporting and governance. Its functions are exercised principally by its operating bodies (the ASB, the Auditing Practices Board, the Board for Actuarial Standards, the Financial Reporting Review Panel, the Accountancy Investigation and Discipline Board and the Professional Oversight Board) and by the Council. The Committee on Corporate Governance, whose members are drawn from the Council, assists in its work on corporate governance.
5. The main role of the ASB is to issue accounting standards. The ASB collaborates with accounting standard-setters from other countries and the International Accounting Standards Board (IASB) both in order to influence the development of international standards and in order to ensure that its standards are developed with due regard to international developments.
6. The ASB has eleven Board members, of whom two (the Chairman and the Technical Director) are full-time, and the remainder, who represent a variety of interests, are part-time.
7. The Interpretation can be downloaded, free of charge, from the from the ASB section of the FRC’s website (www.frc.org.uk/asb). Hard copies of the Interpretation can be obtained, price £10.00 (post-free) from:

   FRC Publications
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   Telephone: 020 8247 1264
   Fax: 020 8247 1124
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8. Press enquiries should be addressed to Ian Mackintosh (Chairman) on 020 7492 2434, David Loweth (Technical Director) on 020 7492 2420 or Alan O’Connor (Project Director) 020 7492 2421.