A number of museums - the ASB would not reveal which - currently put a price on their entire collections when they file their annual reports. The ASB hopes to encourage others to follow suit, according to a consultation paper published last month by the ASB entitled Heritage Assets: Can Accounting Do Better?
The paper proposes to relax the rule that requires museums to show valuations for all heritage assets acquired since 2001 (Financial Reporting Standard 15) in favour of museums putting a value on their entire collection.
Andrew Lennard, the technical director at the ASB, said: 'Museums believe that a value cannot be put on many of their collections, whereas most accountants believe that you should account for everything. If we could sell a national museum collection for five hospitals - and I'm not suggesting that we should do - then the public has a right to know that information.'
There is a get-out clause for some museums. Under the proposals museums that hold a large number of invaluable items, such as the Rosetta Stone, would not have to show the cost of their heritage assets. But museums that do opt-out of showing the value of collections on their balance sheets would need to give detailed explanations about why they have done this.
'It is just not possible to require all museums to show the valuation of their heritage assets on the balance sheet. It is unusual, in accountancy, to make these sort of concessions, but in this case the grounds for it are, in my view, justified,' said Lennard.
He said that larger and more diverse collections tended to be harder to value, but he emphasised that the decision to value collections rests with the museums and the onus is with the governing body of the museum to see that the appropriate choice is made.
Adrian Babbidge, a museum consultant, said he thought the proposals sounded reasonable. 'Organisations that execute insurance valuations have an idea of the cost of their collections for insurance purposes. There's no reason why that valuation shouldn't be used on the balance sheet.'
Helen Wilkinson, the Museums Association's policy officer, disagreed: 'It makes no sense for collections to be capitalised in this way because they are not costs that a museum could ever realise. If you are a government department with a nice office block you can sell it off and move somewhere cheaper, but museums can't sell collections, so it is a bureaucratic waste of time to value them.'
The consultation closes on 31 May 2006. For further details, visit: www.frc.org.uk/asb
Patrick Steel
The paper proposes to relax the rule that requires museums to show valuations for all heritage assets acquired since 2001 (Financial Reporting Standard 15) in favour of museums putting a value on their entire collection.
Andrew Lennard, the technical director at the ASB, said: 'Museums believe that a value cannot be put on many of their collections, whereas most accountants believe that you should account for everything. If we could sell a national museum collection for five hospitals - and I'm not suggesting that we should do - then the public has a right to know that information.'
There is a get-out clause for some museums. Under the proposals museums that hold a large number of invaluable items, such as the Rosetta Stone, would not have to show the cost of their heritage assets. But museums that do opt-out of showing the value of collections on their balance sheets would need to give detailed explanations about why they have done this.
'It is just not possible to require all museums to show the valuation of their heritage assets on the balance sheet. It is unusual, in accountancy, to make these sort of concessions, but in this case the grounds for it are, in my view, justified,' said Lennard.
He said that larger and more diverse collections tended to be harder to value, but he emphasised that the decision to value collections rests with the museums and the onus is with the governing body of the museum to see that the appropriate choice is made.
Adrian Babbidge, a museum consultant, said he thought the proposals sounded reasonable. 'Organisations that execute insurance valuations have an idea of the cost of their collections for insurance purposes. There's no reason why that valuation shouldn't be used on the balance sheet.'
Helen Wilkinson, the Museums Association's policy officer, disagreed: 'It makes no sense for collections to be capitalised in this way because they are not costs that a museum could ever realise. If you are a government department with a nice office block you can sell it off and move somewhere cheaper, but museums can't sell collections, so it is a bureaucratic waste of time to value them.'
The consultation closes on 31 May 2006. For further details, visit: www.frc.org.uk/asb
Patrick Steel
