Another Day, Another SORP

You may have seen some messages from the Charity Commission recently about a new Statement of Recommended Practice (SORP) which applies to accounting periods starting after 1 January 2015.

Piggy bank

West Yorkshire Community Accounting Service (WYCAS) has published some guidance on the SORPs:

Which SORP to use

The major changes in the SORP 

At present, WYCAS accounts are prepared in line with the current Financial Reporting Standard for Smaller Entities (FRSSE) but WYCAS will discuss with you which SORP to follow when preparing accounts for charities with accounting periods starting after 1 January 2015.

What will change?

If there are doubts about the charity’s ability to continue as a going concern, the nature of these uncertainties must be explained.  This means, if the Balance Sheet looks weak your accountant may ask for supplementary information.

When to recognise income has always been an issue and in essence the current policy continues.  When income is probable (change from certain), measurable and there is entitlement it will be recognised in the financial statements.  Only if there is uncertainty about the charity being able to meet the terms and conditions of the funding should the income be deferred.

The new SORP requires a comparison to the previous period’s split across funds, rather than just in total.  This will probably mean 6 columns on the Statement of Financial Activities. 

If you are concerned or need to know more, please get in touch with WYCAS

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