This article, the eighth in our series on charity accounts, will focus on Charity SORP and Charity Commission guidance on accounting for retirement benefits including what disclosures need to be included as part of the accounts
The thorny issue of how to account for retirement benefits is as important to charities as to other companies and groups. Charities need to think carefully about the issues surrounding retirement benefits and applying common sense in planning ahead.
SORP guidance
Module 17 of the SORP deals extensively with ‘accounting for retirement benefits’. First, reference is made to the definitions of defined benefit and defined contribution pension schemes, which are set out in full in the glossary to the SORP.
Accounting for both types of scheme is covered in the paragraphs that follow. Suffice it to say that defined contribution schemes remain far easier to account for. The cost of such a scheme is simply equal to the annual contribution payable to the scheme and is accounted for as such. As per para. 17.5, costs need to be allocated across the relevant resources expended categories of the SoFA.
