A new version of the Statement of Recommended Practice (SORP), the framework for charity accounting and reporting, is set to receive the green light in May.
In March 2013, the Financial Reporting Council (FRC), the independent regulator that sets, monitors and enforces corporate accounting and auditing standards, issued a new financial reporting standard, designed to form the basis for accounting periods starting on or after 1 January 2015.
For the first time, the new standard addressed some key issues involved in charity accounting and reporting and the Charity Commission and the Office of the Scottish Charity Regulator, which together form the SORP-making body for UK charities, subsequently drafted a new SORP to incorporate its content.
The new draft also addressed the needs of smaller charities that choose to continue reporting under an existing Financial Reporting Standard for Smaller Entities. The new SORP has been written in a modular style, which the authors hope will make it easier for charities to identify the parts that apply to them.
Charities were able to put forward their views on the draft SORP in a consultation that closed on 4 November last year. It attracted 179 responses, which have been taken into account by the SORP-making body, along with feedback received at 26 consultation events.
The text of the SORP is due to be submitted to the FRC in March 2014 before it is approved for release by the FRC’s board. It is anticipated that FRC approval will be received by the end of May 2014, with publication in electronic form as soon as possible afterwards.
The JW Hinks charities team can provide expert advice to charities seeking clarification when the new SORP is released and its implications for them.
For more information, please contact us.
The current draft of the new SORP can be seen at www.charitysorp.org.