The Charity Commission and the Office of the Scottish Charity Regulatory (OSCR) have published guidance to help trustees of large company charities comply with new narrative reporting requirements.

These regulations introduced a requirement on all large and medium sized companies to prepare a strategic report, replacing the previous requirement for a business review. This should provide context for the financial accounts, provide an analysis of the charity's performance, financial position and provide insight into the charity's objectives and the risks and uncertainties it faces.

The Charity Commission and OSCR, who together make up the joint SORP body, say the new requirement will only apply to larger charities set up as companies, generally those with an annual turnover of over £6.5m. Company charities below that threshold, CIOs and non-company charities, which make up the overwhelming majority of charities registered in England, Wales and Scotland, are not affected by the change.

Information sheet 5 - the strategic report explains that affected charities should incorporate the strategic report into the trustees' annual report and accounts and it should be approved in the same way.

The Charity Commission and OCSR say that the change does not require a revision of the current SORP, as it does not affect the fundamental principles of charity reporting set out in the SORP. The SORP is currently subject to a review to reflect changes within UK GAAP. The updated SORP, which is expected to be published later this year, will reflect the change announced today.

The requirement covered by the new information sheet applies to financial periods ending on or after 30 September 2013.