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The Strategic Report: new guidance issued for larger charities

The Charity Commission has issued guidance for charities explaining how to prepare a Strategic Report. This is available on the Commission’s website as Information Sheet 5 – The Strategic Report.

The Strategic Report has been introduced by a new provision in the Companies Act 2006, which will apply to accounting periods ending on or after 30 September 2013. It requires all large and medium-sized companies to prepare a Strategic Report for inclusion in their annual accounts. This means that any charities which are also a large or medium-sized company will be required to prepare the Strategic Report, but unincorporated charities or charities which qualify as small companies will not be affected.

The Strategic Report should provide context for the financial accounts by giving an analysis of the charity’s performance and financial position, as well as providing insight into the charity’s objectives and the risks and uncertainties it faces. The guidance explains that it should be incorporated into the Trustees’ Annual Report and Accounts.

The Commission has stated that the change will not require a revision of the current SORP as it does not affect the fundamental principles of charity accounting set out. However, the SORP is currently undergoing review to reflect changes to UK Generally Accepted Accounting Practice. The updated SORP will be published later this year, and will reflect the current requirements regarding the Strategic Report.

 

 

Date: 31st January, 2014
Author: Wendy Bambrick

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