NMDC response to Financial Reporting Exposure Draft 42: Heritage assets

NMDC has responded to the consultation by the Accounting Standards Board on the Financial Reporting Exposure Draft 42: Heritage Assets (FRED 42).

The aim of FRED 42 is to improve the quality of the financial reporting of heritage assets for entities 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 and it includes proposals for enhanced disclosures of the value of heritage assets, requiring museums to place a materially accurate value on the objects in their collections.

NMDC argues that the approach set out in the revised draft seems to be a retrograde step that will not enhance either the presentation or the clarity of museum accounts. In particular, NMDC strongly disagrees with the view set out in FRED 42 that it is better to report some assets in the balance sheet rather than none, even if this results in only part of an entitys collection of heritage assets being capitalised, since this is likely to sustain the current position under which the carrying value of the collection on the balance sheet is inconsistent, meaningless and misleading.

To download the full NMDC response click here

For more details on FRED 42 see the Accounting Standards Board's website