The Sorp Revision: In summary

A wrap-up by finance expert Don Bawtree

Don Bawtree
Don Bawtree

The final version of the Sorp is to be published in June 2014. What should charities do in the meantime? Remember the transition is spread over three years: year one is the first balance sheet, year two is the comparative numbers and year three is the first full set of accounts under the new rules.

If you have a December year-end, your first balance sheet is imminent. Plan now for the new rules. Start with a review of every aspect of your reporting that can be affected. Don't forget new requirements, such as financial instruments and even holiday pay.

Some topics, such as donated stock, might present a choice. Future systems and reporting might depend on that choice, so begin to form a view now.

This will also be a good time to consider the annual report and how effective you are in measuring impact. Look at your strategy for the next few years and how it will be affected by the new look figures. Will new assets or liabilities affect future funding? Do you need to bring forward system changes? Will this affect any loan covenants? If you are lucky, the changes will be minimal, but for others they might be substantial.

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