Charity SORP out for consultation to create single accounting framework

The Charity SORP 2015 has to be reworked due to the withdrawal of FRSSE accounting rules with standard-setters planning to issue a single SORP for all sizes of charity. Sarah Perrin ACA considers the pros and cons

After a brief period of separation, the accounting for small and large charities preparing accruals accounts will once more be guided by a single Statement of Recognised Practice (SORP) if the latest proposals for the sector are approved.

As part of the consultation running until 18 September, the Charity Commission and the Office of the Scottish Charity Regulator (joint SORP-making body) are proposing that only larger charities be required to prepare a Statement of Cash Flows. At the same time, the definition of ‘larger’ would no longer be linked to the audit threshold.

The proposals respond to the changes being made to the UK accounting regime, with the anticipated withdrawal of the dedicated Financial Reporting Standard for Smaller Entities (FRSSE) from January 2016.

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