Further changes are on the way to the new Charities Statement of Recommended Practice (SORP) regime that took effect in January 2015.
The Charities SORP 2005 was replaced for accounting periods beginning on or after 1 January 2015 with two versions, the FRSSE (Financial Reporting Standard for Smaller Entities) and the FRS 102 SORPs.
SORPs must be compliant with the accounting standards of the Financial Reporting Council (FRC) and it is anticipated that the FRC will withdraw the FRSSE for accounting periods beginning on or after 1 January 2016 as a result of revisions to the UK and Irish GAAP (Generally Accepted Accounting Practice).
Now the Charity Commission and the Office of the Scottish Charity Regulator have launched a consultation that all charities use the FRS 102 SORP for reporting periods beginning on or after 1 January 2016 with only larger charities required to prepare a Statement of Cash Flows and on redefining “larger charity” as an organisation with a gross income exceeding £500,000 or €500,000 in the Republic of Ireland.
The consultation documents and a draft Update Bulletin of changes can be seen at www.charitysorp.org, where the finalised Update Bulletin will be published, probably in late February or March 2016, once it has gained FRC approval. The consultation runs until 18 September.
Laura Anderson, joint chair of the SORP committee, which makes recommendations on SORP to the Charity Commission and OSCR, 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. 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.”
Moore Thompson’s charity specialists are ideally placed to assist charities respond to future changes in the Charities SORP and as ensure that accounts are compliant with the requirements of the new SORP when it takes effect. For more information, please contact us.