The new Statements of Recommended Practice (SORP) – one for charities using the FRS 102 standard and the other for smaller charities working with the FRSSE – are now available online.
The Charity Commission and the Office of the Scottish Charity Regulator have published the two new SORP accounting standards for charities, applying to financial years beginning on or after 1 January 2015.
The new Statements of Recommended Practice are available online.
In addition to the SORP for charities using the Financial Reporting Council’s FRS 102 standard, there is a separate SORP available to smaller charities working with the Financial Reporting Standard for Smaller Entities. The FRSSE is for charities that meet two of three criteria: an annual income of less than £6.5m, total assets of less than £3.26m or fewer than 50 employees.
Jane Hobson, head of policy at the Charity Commission, said that the new SORP met public demand for transparency in the sector.
The report Public Trust and Confidence in Charities 2014, published by Ipsos Mori for the commission last month, said that per cent of people agreed “it is important that charities provide the public with information about how they spend their money”.
Hobson said: “The SORPs clearly lay out the reporting rules to help charities be transparent, meet the high expectations held by the public and uphold the high levels of trust in the sector.
“These changes aren’t just for finance directors and treasurers to think about; trustees must engage with what the changes mean for the charity and start thinking now about the information they will need to report on next year.”
Laura Anderson, joint chair of the SORP Committee and head of enforcement at the OSCR, said: “The two new SORPs reflect the feedback we received during the consultation and allow for the specifics of the different accounting standards. The online modular format should be welcomed by the sector, because it allows users to select only those areas that are relevant to them, resulting in a more streamlined, user-friendly document.”
Caron Bradshaw, chief executive of the Charity Finance Group, said: “A great deal of effort from both the Charity Commission and the OSCR, supported by the SORP Committee, has gone into the development of a modular format with the user in mind and thinking small first. Given that the vast majority of those in our sector are small or micro-charities, this is a wholly welcome move.”
After a public consultation held from July to November 2013, the new SORPs were created by the regulators and the SORP Committee and given approval by the FRC on 22 May.
BWMacfarlane are hosting a free seminar to guide charities through these changes on 20 October 2014, to book a place please email Vicki Harper firstname.lastname@example.org.