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The joint SORP-making body has launched a public consultation

The joint SORP making body has launched a public consultation on the next version of the charities accounting and reporting framework.  The Statement of Recommended Practice: Accounting and Reporting by Charities (the SORP) aims to promote consistency and transparency across the sector.  Following the SORP makes charity accounts easy to compare, understandable and useful for donors, the people they help, and the public.

The SORP has been updated to reflect changes introduced by the Financial Reporting Council (FRC) to FRS 102, the Financial Reporting Standard applicable in the UK and Republic of Ireland.  It has been updated to reflect changes to how charities will need to recognise certain types of income and certain types of leases in their accounts.  The consultation is seeking views on how the revised requirements are explained in the context of charities.  Charities are also encouraged to ready themselves for these two changes, the substance of which is already decided.

Improvements are also proposed in other areas that are within the discretion of the SORP-making body.  These are to make the SORP more straightforward to navigate for charities, and to improve information for the people they help, donors and the public about how charity resources are stewarded.  These proposed changes include:

• introduction of 3 tiers based on income levels to ensure proportionate reporting, whilst also meeting the information needs of users
• advancing reporting in important areas such as impact reporting, reserves, going concern and volunteers
• introduction of proportionate reporting for environmental, social and governance issues

The SORP-making body is keen to hear the views of charities, preparers, auditors and independent examiners of charity accounts, trustees, employees and the people charities help and others who may use charity accounts including donors, funders, financial supporters and other stakeholders.

The consultation on the ‘Exposure Draft of the Charities Statement of Recommended Practice: Accounting and Reporting by Charities’ was launched on 28 March 2025 and will run for 12 weeks.