In October 2019, the second edition Charities SORP (FRS 102) was released. It’s applicable to charities preparing their accounts in accordance with the Financial Reporting Standard in the UK and Republic of Ireland.

This edition of the SORP consolidates the changes made by SORP Update Bulletins 1 and 2 into one document. It includes those updates which reflect changes in Accounting Standards and legislation subsequent to the issue of the first edition Charities SORP (FRS 102).

It includes a Basis of Conclusions that provides a summary of those changes made to the Charities SORP through Update Bulletins since 2014. These changes have included:

  • the withdrawal of Charities SORP (FRSSE)
  • a revised definition of larger charities to those with a gross income exceeding £500,000
  • the requirement for the preparation of a statement of cash flows by larger charities
  • the requirement for comparative information to be provided for all material amounts presented in the current period’s financial statements, including the notes
  • the requirement for gift aid payments made by a subsidiary to its parent to be accounted for as distributions, akin to a dividend, and the treatment in the subsidiary accounts
  • removing the undue cost or effort exemption from the requirement for major components of an item of property, plant and equipment that have significantly different useful economic lives to be depreciated separately over their useful economic life
  • an accounting policy choice for entities that rent investment property to another group entity whereby they can choose to measure that investment property using the cost model or fair value
  • a new requirement for an entity to disclose a net debt reconciliation note to the cash flow statement
  • other amendments arising from the Financial Reporting Council's 2017 Triennial Review of FRS 102.

The SORP does not take into account Information Sheet 3, which explains how charitable companies need to respond to changes to the Companies Act.

Croner-i provides legislation, guidance and tools for charities and firms acting for them as set out in our Charities Quick Link page.

This second edition of the Charities SORP (FRS 102) (2019) is available on Croner-i Tax and Accounting here.

If you act for charities or you are a trustee or charity finance director, you might find the Charities Tax, Audit & Accounting Guide an invaluable resource. It guides you through the legal, auditing, accounting and taxation aspects of dealing with charities. It's authored and updated by leading experts at BDO.

Preparing Charity Accounts, authored by Helena Wilkinson and Iain Storey from Price Bailey, is a one-stop reference guide on current reporting and disclosure requirements to assist reviewers and preparers of charity accounts, whatever the size of the charity.

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