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SORP issues new strategic report guidance

30 January 2014

The SORP committee has issued new guidance on how to prepare a strategic report for larger company charities.

The new guidance, published by the Charity Commission (CC) and the Office of the Scottish Charity Regulatory (OSCR), which jointly make up the Statement of Reporting Practice (SORP) committee, aims to help trustees meet new requirements. 

The requirements only apply to larger charities set up as companies - ‘large and medium sized companies’ are generally those with an annual turnover of over £6.5m. Company charities below that threshold, CIOs and non-company charities - the overwhelming majority of charities registered in England, Wales and Scotland, are not affected by the change.

The guidance explains how trustees need to respond to a new provision of the Companies Act 2006, introduced by the (Strategic Report and Director's Report) Regulations 2013. 

The regulations introduced a requirement on all large and medium sized companies to prepare a strategic report, to replace the previous requirement for a business review.  The strategic report should provide context for the financial accounts, provide an analysis of the charity's performance, financial position and provide insight into the charity's objectives and the risks and uncertainties it faces.

The requirement will only apply to larger charities set up as companies - ‘large and medium sized companies’ are generally those with an annual turnover of over £6.5m. Company charities below that threshold, CIOs and non-company charities - the overwhelming majority of charities registered in England, Wales and Scotland, are not affected by the change.

The requirement covered by the new guidance applies to financial periods ending on or after 30 September 2013.

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