The Accounting Standards Board has today issued a new Financial Reporting Standard that will improve the reporting of assets held by museums and art galleries. FRS 30 ‘Heritage Assets’ introduces significant new disclosure requirements for reporting the content and value of collections.

The standard covers heritage assets that are kept principally for their contribution to knowledge and culture, regardless of whether these assets are reported in the balance sheet. New disclosures will provide information about an entity’s total holding of heritage assets and its stewardship of these assets. Illustrative examples of the disclosures are provided to help with implementation.

FRS 30 retains the recognition and measurement requirements in FRS 15 ‘Tangible fixed assets’, which require heritage assets to be reported in the balance sheet where information is available on cost or value. The ASB remains of the view that heritage assets are assets and that the best financial reporting is secured when they are reported as such in the balance sheet. To encourage a valuation approach, the FRS allows entities to use internal valuations without the need for a full valuation every five years.

Announcing the issue of FRS 30 ‘Heritage Assets’, Ian Mackintosh, Chairman of the ASB, said:

“There can be little doubt that a museum’s collections and exhibits are its greatest assets. Yet, under the current accounting practice, many museums and galleries publish accounts that do not adequately reflect the collections that they exist to safeguard and preserve. We expect the new disclosures being introduced in FRS 30 to significantly improve the financial reporting of heritage assets and thereby contribute to better financial management in this important sector.”

The new FRS should be applied in respect of accounting periods beginning on or after 1 April 2010. Earlier application is encouraged.

This marks the culmination of the ASB’s project on heritage assets, which was launched in January 2006 with publication of the Discussion Paper ‘Heritage assets: Can accounting do better?’

In developing the FRS, the ASB considered comments on the DP and on the exposure drafts, FRED 40 and 42. Despite the more radical approaches proposed in these consultations, the ASB is not persuaded there is a better accounting solution for heritage assets than the current approach, which is based on FRS 15 and results in entities capitalising those heritage assets that have been acquired since 2001.

1. The ASB is an operating body 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 Accounting Standards Board, the Auditing Practices Board, the Board for Actuarial Standards, the Financial Reporting Review Panel, the Professional Oversight Board and the Accountancy and Actuarial Discipline Board) and by the FRC Board. The Committee on Corporate Governance assists the Board in its work on corporate governance.
2. 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.
3. 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.
4. The FRS can be downloaded free of charge from the publications page of the ASB website (http://www.frc.org.uk/asb/publications/). Hard copies will be available, price £2.50 (post-free) from ASB Publications, 145 London Road, Kingston Upon Thames, Surrey, KT2 6SR (020 8247 1274). Web: www.frcpublications.com.
5. Press enquiries should be directed to: Ian Mackintosh (Chairman) on 020 7492 2440 or Alan O’Connor (Project Director) on 020 7492 2421.