New draft Charities Statement of Recommended Practice (SORP)

On 9 July 2013 the Charity Commission for England & Wales and the Office of the Scottish Charity Regulator (OSCR) launched a consultation on the above.

All charities that prepare their accounts on an accruals basis to give a ‘true and fair’ basis must follow the SORP.

In March of this year a new Financial Reporting Standard (FRS102) was issued by the Financial Reporting Council (FRC), which will form the basis of financial reporting for accounting periods starting on or after 1 January 2015. This new financial reporting standard addresses some of the key issues faced in charity and ‘public benefit entity’ accounting and reporting. Charities can continue to report under the Financial Reporting Standard for Smaller Entities (FRSSE) and not FRS102 if they meet the FRSSE criteria.

A new SORP is being drafted to accommodate FRS102 and the FRSSE.

Amongst the proposed changes are:

•  A new section on social investments.
•  A reduced number of headings required in Statement of Financial Activities.
•  Material grants made to institutes to be listed in notes, rather than made available in a separate publication.

The consultation which is published on a ‘SORP’ micro-site will run for four months closing on 4th November 2013. A PDF of the Exposure Draft of the SORP has been published and includes the facility to select and download individual sections of the SORP, along with an Invitation to Comment including a list of consultation questions.

More details about the consultation, how to comment and the upcoming events can be found by visiting either the Charity Commission or OSCR websites or the new SORP micro-site: charitysorp.org