It has recently been announced that the charities Statements of Recommended Practice (SORP) have been approved for publication by the Financial Reporting Council, the Office of the Scottish Charity Regulator (OSCR) and the Charity Commission.
The Financial Reporting Council (FRC) – the standard-setting body for UK accounting rules – approved the SORPs in May with final documents expected to be published in the summer.
The SORPs have been developed in response to feedback to a consultation in order to govern charity accounts.
- One SORP is compulsory for charities over the company audit threshold – most of those with incomes over £6.5m – which must follow a new financial reporting standard developed by the FRC, known as FRS 102.
- Smaller charities will be free to follow this SORP or use the specialist SORP for smaller entities, which will apply an existing standard, the Financial Reporting Standard for Smaller Entities, which applies to charities below the audit threshold. The new standard applies to charity accounts and takes effect for financial years beginning on or after 1 January 2015.
Sam Younger, chief executive of the Commission and joint chair of the SORP Committee said: “The FRC’s approval is a culmination of many years work; we and OSCR are especially grateful to the members of the SORP committee for their commitment and attention detail. The result is a high quality accounting and reporting framework for charities.”
At Nicklin, our specialist team can provide expert advice to charities seeking clarification about the implications that the new SORPs may have for them. For more information please contact us.