The Charities SORP-making body (SMB) has completed its consultation phase, with nearly 150 individuals and organisations contributing valuable feedback. As we approach the release of the revised SORP this October, Burgis & Bullock is highlighting the key developments charities need to be aware of – and how to prepare.
Some changes are already set in stone via updates to the UK accounting standard FRS 102, which the SORP cannot override. These will apply to all charities preparing SORP-compliant accounts.
What’s changing?
- Lease accounting: Most lease arrangements must now be recognised on the balance sheet, unless exemptions apply.
- Revenue recognition: A new five-step model will apply to income from exchange contracts, requiring more structured reporting.
These changes are mandatory, regardless of the final shape of the new SORP.
The proposal for a three-tier reporting framework received solid support (89% of respondents), but opinions varied on the financial thresholds. Many suggested raising the Tier 1 ceiling above £500,000 and others proposed aligning thresholds with audit limits.
The SMB is reviewing these suggestions, aiming to maintain clarity and simplicity while recognising jurisdictional differences in audit thresholds.
The feedback on Module 1 (Trustees’ Annual Report) was positive, with strong support for prompt questions to guide narrative reporting, sustainability disclosures and enhanced reserves reporting. However, concerns were raised about creating a “tick-box” culture, particularly for smaller charities. The SMB is working to strike the right balance between compliance and meaningful communication.
Modules covering lease accounting, income recognition, and social investments drew feedback around complexity and terminology. The SMB acknowledges the need for clear, accessible guidance and support materials to help charities navigate technical areas confidently.
Do you need help preparing for the new SORP?
Burgis & Bullock’s charity specialists are here to support you with practical guidance, training, and strategic insight. Get in touch to ensure your organisation is ready.
