The Sorp Revision: Branches and groups

Key topics from finance expert Don Bawtree

Don Bawtree
Don Bawtree

There are two changes proposed in respect of branch accounting. One relates to the possibility of treating a subsidiary company as though it was just a branch, so avoiding the need to produce consolidated accounts. This has never been possible before and is unlikely to be accepted.

A second proposal relates to the treatment of special purpose funds, where in some cases the existing Sorp allows them to be treated as part of the charity instead of as separate entities requiring consolidation and group accounts. This might change under any revised Sorp but, if so, it would be unwelcome.

The principles of accounting for groups are essentially unchanged, but watch out for tweaks. The definition of control has altered. In some situations the new wording might affect a group. The notes will sometimes need to include pieces of disclosure about the relationship with subsidiaries.

Charities that are subsidiaries of other entities have long been problematical: the proposed Sorp includes requirements for such charities to explain their relationship with their parents.


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