Changes to UK-Irish accounting practice due to take effect from 2016 mean that the Charities SORPs (Statements of Recommended Practice) will need to be updated. The Charity Commission for England and Wales and Office of the Scottish charity Regulator, who together are the SORP-making body, have today launched a consultation to hear charities’ views on proposed changes to the SORP. These proposed changes anticipate the implementation by the Financial Reporting Council (FRC) of its proposed changes to accounting standards in 2016.
The SORPs have to be updated to comply with the expected changes to accounting standards by the FRC. The FRC requires that a SORP must:
be prepared in accordance with the FRC’s Policy and Code of Practice on SORPs
include no fundamental points of principle that are unacceptable in the context of current practice or to conflict with an accounting standard
The expected changes to GAAP mean that:
The Charities SORP (FRSSE) will not apply for reporting periods (financial years) beginning on or after 1 January 2016
changes are needed to the Charities SORP (FRS 102) effective for reporting periods (financial years) beginning on or after 1 January 2016
The Charity Commission for England and Wales and the Office of the Scottish Charity Regulator are now seeking charities’ views on proposals being made for updating the Charities SORP (FRS 102). The consultation documents and draft schedule of changes, called an Update Bulletin, can be viewed via the dedicated SORP micro-site: www.charitysorp.org.
The joint SORP-making body and Charities SORP Committee considered all the available options and these options and the final proposal based on the Charities SORP (FRS 102) are set out in the consultation. The consultation opened on 18 June and closes on 18 September.
Nigel Davies, Head of Accountancy Services and Joint Chair of the SORP Committee, said:
We hope that sector practitioners and users of the accounts will agree with our proposed response to the changes the FRC is making to UK accounting from 2016. Your participation in the consultation exercise is very important to ensuring that the solution is the best one possible.
Laura Anderson, Head of Enforcement at OSCR and Joint Chair of the SORP Committee said:
Our shared aim with the SORPs was to equip the sector to make a smooth transfer to new GAAP in 2015 and to stay compliant with GAAP thereafter. The changes to GAAP from 2016 require a response, and we believe that a single solution based on the Charities SORP (FRS 102) from 2016 on is the best way forward to support the needs of our sector.
The SORP-making body anticipates that the Update Bulletin would be published late February or early March 2016. The Update bulletin will be published on the dedicated micro-site once it has gained the necessary approval from the FRC.
Notes to Editors
The Charity Commission is the independent regulator of charities in England and Wales..
We are the independent registrar and regulator of charities in England and Wales, acting in the public’s interest, to ensure that:
* charities know what they have to do
* the public know what charities do
* charities are held to account
The Office of the Scottish Charity Regulator (OSCR) is the independent regulator and registrar of Scotland’s 23,500 charities and publishes the Scottish Charity Register at www.oscr.org.uk. Our vision is for charities in which the public has confidence and which provide public benefit.
The commission and OSCR together form the joint SORP-making body for charities and is authorised by the Financial Reporting Council for the purpose of developing and issuing the Charities SORP.
The SORP Committee is a sector-based expert committee that advises the joint SORP-making body in its development of the SORP. The Committee includes charity finance directors, charity auditors as well as members reflecting broader charity sector and academic interests.