SORPS issued by the Charity Commission and OSCR apply to charities preparing accounts under UK GAAP to present a ‘true and fair view’ and are intended to supplement accounting standards and other legal and regulatory requirements to reflect transactions or circumstances that are unique within the charities sector. 

The Exposure Draft (link to Charities Commission SORP micro-site) sets out proposals for accounting and reporting by charities in the context of the new accounting framework introduced by Financial Reporting Standard (FRS) 102 applicable in the UK and Republic of Ireland for financial years beginning on or after 1 January 2015.  The Exposure Draft is also relevant to smaller charities that may choose to prepare their accounts under the Financial Reporting Standard for Smaller Entities (FRSSE).  It is anticipated that the SORP will have the same effective date as application of FRS 102.     

Among the key features of the SORP Exposure Draft are: 

• A modular format containing a set of core ‘modules’ which apply to all charities and also a number of additional modules which will only apply to specific charities.  The Charity Commission have highlighted that charities will be able to customise the SORP according to their specific circumstances through an interactive website.  It is hoped that this modular format will help to better meet the needs of the preparers of charity accounts especially for smaller charities. 
• A simplification of the information presented in the Statement of Financial Activities (SOFA). 
  • Income is proposed to be shown under four headings (donations, earned income investment income and other income) rather than the current six. 
  • Expenditure is proposed to be shown under three headings (fundraising costs, expenditure on charitable activities and other expenditure) rather than the current seven.
  • Governance costs no longer disclosed on the face but within the notes. 
• Removal of other disclosures deemed "unnecessary" by the existing SORP such as having to prepare a liquidity statement where a cash flow is not prepared. 
• Disclosure of the name of the institution in receipt of material grants in the notes to the accounts rather than in a separate publication. 

The Charity Commission and OSCR invite comments from preparers, auditors and examiners of charity accounts, trustees, employees and beneficiaries of charities and others who may use charity accounts including donors, funders, financial supporters and other stakeholders.  Comments are invited until 4 November 2013. 

Click for:

Press release (link to Charities Commission website)

Invitation to Comment (link to Charities Commission SORP micro-site)

Exposure Draft (link to Charities Commission SORP micro-site)