FRC publishes an updated ‘Policy and Code of Practice on SORPS’

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01 May, 2014

The Financial Reporting Council has published an updated document that sets out its ‘Policy and Code of Practice on SORPS’ with effect from 1 May 2014. The updated document replaces the ‘Policy and Code of Practice’ issued in August 2013.

Statements of Recommended Practice ("SORPs") are developed in the public interest and set out current best accounting practice. SORPS, issued by ‘SORP-making bodies’ are intended to supplement accounting standards and other legal and regulatory requirements to reflect transactions or circumstances that are unique within specialised industries or sectors.  SORPs are issued on subjects on which it is not considered appropriate to issue an accounting standard at the time. 

SORPs cannot be taken as authority to depart from the requirements imposed by accounting standards, nor to extend the scope of accounting standards to include entities or circumstances which are otherwise excluded from specific accounting standards or accounting standards in general.

The SORP ‘Policy and Code of Practice’ provides the policy which industry or sectoral bodies must follow if they are to become a recognised ‘SORP-making’ body.  The SORP ‘Policy and Code of Practice’ also contains a Code of Practice for such bodies on developing SORPS.

The updated ‘Policy and Code of Practice on SORPS’ can be obtained from the FRC website.

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