Charities Sorp Committee starts work on new modular Sorp

Finance | Tania Mason | 6 Dec 2010

The Charities Sorp Committee has started work on a modular e-version of the next Sorp, to ensure it dovetails with the three-tier approach that the Accounting Standards Board is planning for the move to harmonise UK reporting standards with international ones.

Ray Jones (pictured), head of accountancy policy at the Charity Commission, told Civil Society that the three-tier approach presents a big challenge, as the Sorp needs to address each tier and each tier is different.

“The Charity Sorp Committee believes the best approach is to develop a ‘modular’ Sorp that would allow charities to download or print off those parts or modules of the Sorp that are relevant to their own particular activities and tier,” he said.

“For example, there is no point printing off a module on accounting for legacies if your charity has received no legacies.

“The impact of tiered reporting might point to a longer Sorp but a modular approach could make it shorter for smaller charities with less complex activities. The motto could be ‘download only what you need’.”

Public benefit entities standard 'progressing well'

However, development of the new Sorp can only proceed once the ASB’s plans for the future of UK GAAP have been finalised, and the new public benefit entities (PBE) standard has been created.

Jones said the PBE standard was progressing well, and would address the recurring issues of public benefit accounting, including:

•   Accounting for giving (revenue from non-exchange transactions)
•   Multi-period commitments
•   Impairment (in absence of cash from)
•   Soft loans
•   Identifying the boundaries of the reporting entity
•   Heritage assets; and
•   Combinations.

Jones said the Sorp Committee planned to devise the modules in 2011 with the intention of having a fully-developed Sorp in good time for the implementation of the new framework for accounting periods starting in July 2013.

Directory: Charity Commission | The Sorp Committee

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