19 June 2015
The Charity Commission has launched a consultation about changes to statements of recommended practice (SORP) as a result of changes made to UK accounting standards.
The changes to UK-Irish accounting practice made by the Financial Reporting Council (FRC) are due to take effect from 2016, which means that the charities SORPs will need to be updated.
The SORPs have to be updated to comply with the expected changes to accounting standards by the FRC. The FRC requires that a SORP must be prepared in accordance with the FRC’s Policy and Code of Practice on SORPs; and include no fundamental points of principle that are unacceptable in the context of current practice or to conflict with an accounting standard.
The expected changes to GAAP mean that the charities SORP will not apply for reporting periods (financial years) beginning on or after 1 January 2016; and changes are needed to the Charities SORP (FRS 102) effective for reporting periods (financial years) beginning on or after 1 January 2016.
The Charity Commission and the Office of the Scottish Charity Regulator are now seeking charities’ views on proposals being made for updating the charities SORP (FRS 102). The consultation documents and draft schedule of changes, called an Update Bulletin, can be viewed via the dedicated SORP micro-site: www.charitysorp.org.
The joint SORP-making body and charities SORP Committee considered all the available options and these options and the final proposal based on the Charities SORP (FRS 102) are set out in the consultation. The consultation opened on 18 June and closes on 18 September.
Laura Anderson, Head of Enforcement at OSCR and Joint Chair of the SORP Committee said: ‘Our shared aim with the SORPs was to equip the sector to make a smooth transfer to new GAAP in 2015 and to stay compliant with GAAP thereafter. The changes to GAAP from 2016 require a response, and we believe that a single solution based on the Charities SORP (FRS 102) from 2016 on is the best way forward to support the needs of our sector.’
The SORP-making body anticipates that the Update Bulletin will be published late February or early March 2016. The Update bulletin will be published on the dedicated micro-site once it has gained the necessary approval from the FRC.