Charities call for accounting rules to be tailored for size

06 Apr 2021 News

Charities think that accounting rules should be tailored to the size of an organisation, according to the Charity Finance Charities SORP Survey.

The survey also found that the majority of charities feel the Charities SORP is fit for purpose, with 68% saying it was, compared to 32% saying it was not.

While a similar split was evidence in most size categories, the smallest charities felt differently. For those with less than £1m in annual turnover, just 29% said the Charities SORP was fit for purpose and 71% said it was not.

Tailoring for size

When asked what single element respondents would like to see added to the next edition of the Charities SORP, a tailoring for size was the single most popular choice at 29%. This gained some support from charities of all sizes, including 50% of the smallest charities.

The second most popular choice was the addition of FRS 102 sections so that the Charities SORP and FRS 102 do not have to be referred to separately (21%).

A further 13% opted for more guidance on narrative reporting issues like environmental reporting.

This was followed by example lay-outs (9%), sector specific guidance (6%) and including receipts and payments accounting (3%).  

A further 19% selected “other” and provided a range of suggestions. These included the removal of comparative reporting, the addition of reporting of regulatory referrals and guidance on the reporting of reserves.

Impact measurement

The results of the survey, which appear in the April edition of Charity Finance magazine, also suggest that the majority of charities don’t want to see the Charities SORP to increase its focus on impact reporting.

Approximately two-thirds of respondents said the Charities SORP should maintain its current balance (65%) with 35% believing that it should focus more on charitable impact.

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