Charity Commission wants consultation on new Sorp to start soon

Regulator makes announcement after Financial Reporting Council says it will publish a new financial reporting standard by the end of this month

Charity Commission
Charity Commission

The Charity Commission hopes to start a consultation on a new Statement of Recommended Practice to govern charity accounting "sooner rather than later".

The announcement comes after the Financial Reporting Council, the accounting standards body for the UK, decided that a new financial reporting standard should be published by the end of March, and probably "in the next couple of weeks".

The new standard, FRS 102, will replace the UK Generally Accepted Accounting Practice as the rules that govern accounting for most entities in the UK, including charities.

The new standard contains within it specific rules for "public benefit entities", a definition that covers charities as well as bodies such as universities and housing associations.

The updated Sorp will interpret the new standard for charities. It is being developed by a committee that includes representatives from the commission and the Office of the Scottish Charity Regulator, sector finance directors, auditors and other accounting experts. The committee will get agreement from the FRC before going out to general consultation.

"We are taking the revised Sorp through the FRC sign-off processes in late spring," the Charity Commission spokeswoman said. "Subject to the FRC’s agreement, we then hope to publish the draft for wider consultation later in the year. We hope to publish for consultation sooner rather than later."

Kat Smithson, policy officer at the Charity Finance Group, said that although there appeared to be plenty of time for a consultation on the Sorp, the deadlines were actually quite tight.

"Whenever FRS 102 was published, both it and the Sorp would have to be introduced in January 2015," she said. "So the sooner it’s out, the longer we have for a consultation on the Sorp.

"The Sorp has to go through a long process of agreement and verification with the FRC. And it has to be finished in 2014 to give charities time to study it before it is introduced.

"This way, there is likely to be time for a full three-month consultation with the sector on the Sorp."

Smithson said the consultation would need to look at issues where there was "more flexibility in the standard", including when to account for income and how to account for grants given over a number of years.

Have you registered with us yet?

Register now to enjoy more articles and free email bulletins

Register
Already registered?
Sign in
Follow us on:
  • Facebook
  • LinkedIn
  • Twitter
  • Google +

Latest Jobs

RSS Feed

Third Sector Insight

Sponsored webcasts, surveys and expert reports from Third Sector partners

Markel

Expert Hub

Insurance advice from Markel

Safeguarding in the Third Sector

Safeguarding in the Third Sector

Partner Content: Presented By Markel

Safeguarding - the process of making sure that children and vulnerable adults are protected from harm - is a big concern for organisations in the third sector.

Third Sector Logo

Get our bulletins. Read more articles. Join a growing community of Third Sector professionals

Register now