New changes to the framework for charity accounting and reporting will take effect from 2015, which could have implications for academy trusts.
The current Charities Statement of Recommended Practice (SORP) will be replaced for accounting periods beginning on or after 1 January 2015 with two new versions of the SORP, the FRSSE (Financial Reporting Standard for Smaller Entities) SORP and the FRS 102 SORP.
The SORP is used by the Education Funding Agency (EFA) as the basis of its annual Academies Accounts Direction. It has announced it will be using the FRS 102 Charities SORP as the basis for this and will not be producing an accounts direction based on the FRSSE SORP 2015.
A brief guide to the Charities Statement Of Recommended Practice 2015 (SORP 2015) has been published by EFA, which says the new SORP should not require major changes to academy trust financial reporting, but that academy chief financial officers, accounting officers, trustees and auditors need to be aware of how it will affect their organisations.
Guidance highlights what academies should be doing now, as well as setting out the principal changes and the timing of these. It says that as a minimum, academy trusts need to consider the following issues:
- when the trust will first need to adopt SORP 2015 (for academy trusts incorporated before 1 January 2015 first adoption will be for the period ending 31 August 2016)
- revisiting accounting policies
- whether their accounting systems will be able to accommodate the changes
- whether they need specialist assistance to identify transitional issues
- whether staff need training on the changes to the SORP.
Our team of highly qualified accountants at Nicklin’s are able to provide expert guidance on all aspects of the new Charities SORP and how it will affect academy trusts. For more information, please contact us.