Revised version of Charities SORP accounting rules is published

18 Nov 2019 News

An updated version of the accounting and reporting rules for charities has been published in order to consolidate changes that have been released in separate documents over recent years.

The latest Statement of Recommended Practice (SORP), known as Charities SORP (FRS 102), was issued in July 2014 and effective from January 2015. Since then, however, two update bulletins have been released, meaning charities have had to refer to more than one document when compiling their annual reports and accounts.

Nigel Davies, joint chair of the SORP-making body and the SORP Committee, told Civil Society News: “It’s a long-standing promise. We’ve been promising to issue a new edition of the SORP to bring the bulletins and the SORP text together for a few months. So we’re making good on a promise we made to the sector. 

“The purpose of it is to bring three different documents into one place. That’s the original SORP at launch and the changes we had to make.” 

He said the reason for those changes was largely due to changes in UK accounting standards.

‘Stuck’ with longer accounts

Among other things, the first update bulletin re-defined a “larger” charity to be those with a gross income over £500,000 in the UK.

The main change in the second bulletin, which affected all charities, was a correction to an error pointed out by the Financial Reporting Council and others. The SORP-making body had not originally required comparatives for everything in charities’ accounts.

Davies said: “The clarification was you have to provide comparatives for everything, and that affected everybody. It has caused accounts to get a bit longer. 

“What we do about that will be for the next SORP; we’re stuck with the situation as it is at the moment.” 

He added that the effective date for using the reissued document is financial years starting 1 January 2019. Until then charities can continue to use the original SORP in combination with the update bulletins and helpsheets to navigate.  

Committee questions ‘radical nature’ of SORP Governance Review

In June, an independent review of the governance of the SORP was released, recommending that the SORP Committee should be shrunk, have a redefined role, and include donors, funders and representatives of smaller charities.

calls for the SORP Committee to be shrunk, to have a redefined role, and to include donors, funders and representatives of smaller charities. - See more at:

Recently published minutes of a meeting on 17 July reveal that members of the Charities SORP Committee as it was constituted at the time questioned the radical nature and appropriateness of recommendations.

The review was described by the committee chair as an opportunity to take stock and allow difficult questions to be asked.

However, some of the committee felt that findings for the governance review were based on a relatively small evidence base, and that a large proportion of stakeholders were content with current arrangements.

There were additional concerns about whether the review panel was well placed to develop balanced recommendations.

The committee also discussed the “realism of an ideal” that everyone should be able to understand simple annual reports and accounts from charities, while at the same time requiring high quality reporting.

Information sheets

The SORP-making body intends to release two new information sheets to assist charities in complying with the SORP, supplementing the three that have already been released since 2017.

The next one, Information Sheet 4, will concern pension accounting, though no publication date has yet been set.

Davies said: “Information Sheets are advisory and are not part of the SORP, so do not change or update the SORP. 

“Instead we publish them separately, and although we hope that practitioners will find them useful, unlike the SORP, practitioners can choose not to read them or to take a different approach.”

Civil Society Media's Charity Finance magazine will be releasing its latest SORP Compliance Checklist, which will be updated for all the changes, early next year in association with accountancy firm BDO. To register your interest in buying a copy, please email [email protected].

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