A longer wait for the new SORP
The accounting rules for charities, set out in the charity SORP (Statement of Recommended Practice) derive from Financial Reporting Standard 102 (FRS102) which is published by the Financial Reporting Council (FRC). The charity sector had been expecting a new SORP effective for accounting periods commencing on or after 1st January 2024.
The FRC have recently pushed back the timing of the next version of FRS102 which will consequently push back the next version of the charity SORP. They are now saying that the new FRS102 (and therefore the new SORP) will apply to accounting periods commencing no earlier than 1st January 2025. This language leaves scope for further delays to the implementation date.
In practical terms, this means charities won’t be reporting under new accounting rules for quite a while yet. Unless they have a shortened accounting period, the first sets of accounts will be for the year ended 31st December 2025 / 31st March 2026, although it should be remembered that comparative figures will be restated under the new rules.
The FRC say that they expect to publish an exposure draft of the new FRS in 2022 which will give us a good insight into where the major changes might be; the big unknowns at the moment surround whether the provisions of International Accounting Standards on Revenue Recognition and Leases are brought into FRS102. These could cause significant changes for charities.
An exposure draft of the new SORP and a public consultation will follow the FRS102 exposure draft.
Meanwhile, the SORP committee are well-advanced in our work on the other changes which will come in the new SORP. If you’re interested, you can follow our discussions via the minutes of our meetings at www.charitysorp.org
This blog is intended as a general overview and discussion of the subjects dealt with. It is not intended to be, and should not be used as a substitute for taking professional advice in any specific situation. Wylie & Bisset LLP (and its subsidiary Wylie & Bisset (Audit) Limited) will accept no responsibility for any actions taken or not taken on the basis of this blog. If you would like further advice or would like to discuss any of the issues raised in the blog then please get in touch with your regular contact, or via our contact form.