The Sorp Revision: Volunteers and donated items

By finance expert Don Bawtree

Don Bawtree
Don Bawtree

The Sorp exposure draft has revisited accounting for volunteers, donated items, property, services and facilities. All income now has to be booked when it is probable, not reasonably certain. That will apply to donated items too.

Donated services (perhaps secondments?) are accounted for on the value of the gift to a charity. So a chief executive on a corporate social responsibility day will not see his or her salary appear as income.

The principle that volunteers should not be in the accounts is now limited to "general volunteers", an undefined term. The accounts will now have to include a note explaining the role and scale of volunteering. This used to be in the annual report, so did not need auditing; but now it will.

Donated goods, such as shop stock, don't go into the accounts if they are difficult to value and the systems can't cope with recording it all. This might be difficult to justify and can apply only to a charity, not a subsidiary. Goods given for distribution will now go into the accounts as stock if the charity still holds them at the year-end.


Topics:
Finance Advice

Have you registered with us yet?

Register now to enjoy more articles and free email bulletins

Register
Already registered?
Sign in
Follow us on:

Latest Jobs

RSS Feed

Third Sector Insight

Sponsored webcasts, surveys and expert reports from Third Sector partners

Markel

Expert Hub

Insurance advice from Markel

Charity property: could you be entitled to a huge VAT saving?

Charity property: could you be entitled to a huge VAT saving?

Promotion from Third Sector promotion

When a property is being constructed, VAT is charged at the standard rate. But if you're a charity, health body, educational institution, housing association or finance house, the work may well fall into a category that justifies zero-rating - and you could make a massive saving

Third Sector Logo

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

Register now