Charity regulators kick off SORP consultation

Charity Comments Off on Charity regulators kick off SORP consultation

The Charity Commission and the Office of the Scottish Charity Regulator have launched a consultation on possible improvements to the new charities Statement of Recommended Practice (SORP) for reporting and accounting ahead of the next round of planned updates to UK accounting standards

The consultation is looking at the SORP’s structure, format and accessibility; any implementation issues; changes suggested by both the charity regulators and SORP committee members and any ideas for items to remove, change or add to improve the SORP.

Possible changes highlighted in the consultation document include introducing a third tier of reporting by only the largest charities; a review of the information provided in the trustees’ annual report; more specific definitions of support costs and fundraising costs; and consideration of how ‘revenue’ and ‘capital’ items are shown in the Statement of Financial Activities (SoFA).

The themes identified by the charity regulators for consideration include risk management; making a difference for the public benefit; going concern; enhanced analysis of expenditure; disclosure of who funds a charity; and the inclusion of a key facts statement. 

The Financial Reporting Council (FRC) is expected to review the FRS 102 standard next year, with the revised standard anticipated to take effect from 2019. Any changes to the FRS 102 standard will in turn require a new SORP, so this research exercise will therefore inform the development of the next exposure draft of the SORP, which is likely to be consulted upon in 2018.

The SORP-making body anticipates that the results of the SORP research exercise will be published by mid-2017.

The consultation closes for comment on 11 December 2016. 

Details are on a dedicated SORP microsite here