CHARITIES SORP (FRS 102) (second edition - October 2019)
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CHARITIES SORP (FRS 102) (second edition - October 2019)
November 30th, 2019     A+ | a-

A revised issue of the SORP was issued in October 2019. This revision did not, in fact, introduce any substantially new concepts. Its main purpose was to consolidate into one authoritative document the previous updates included in the previous Bulletins 1 and 2.

The revised SORP is compulsory for all accounting periods commencing on or after 1st January 2019, but early adoption is permitted in most cases, and the text below substantially reproduces the information contained in our previous update about SORP Bulletin 2.

In the templates produced by Sorpaid, reference is made in the Trustee’s Report and in the notes to the accounts relating to the basis of accounts preparation. Those references refer to Bulletin 2 and are still correct, although if users wish to do so the references can be changed to ‘The revised SORP issued in October 2019, effective for all accounting periods commencing on or after 1st January 2019’

When we next do a substantial rewrite of the templates, we will update this reference, but referring to Bulletin 2 is perfectly acceptable.

The main features fall into two distinct categories:-

  1. Disclosure requirements and formatting of the accounts
  2. Rules about how the underlying figures are arrived at before entering to the accounts.

So far as the first category is concerned, Sorpaid updated the templates for these disclosures in mid 2019, and the templates comply..

The second category will require accountants to be familiar with a number of the concepts and we would suggest that the revised SORP is reviewed.

Disclosure requirements

       1, The major change to the disclosure requirements is in paragraph 3.3. The SORP now makes it clear that it requires comparative information to be shown for all disclosures that are required by the SORP, not just as required by FRS102.

This means, for example, that all figures must be analysed between unrestricted, restricted and endowment funds in the comparatives, whereas previously the only specific requirement to do this was in the comparative SOFA.

For charities with only unrestricted funds, this will not mean a major change. For other charities it will involve further analysis and more detailed notes. We feel that this is over the top, but we accountants must comply with the SORP requirements.

     2. One simplification is that the disclosure of stock movements as an expense is  no longer required.

     3. In cash flow statements, a requirement that charities prepare a reconciliation of net debt as a note in the cash flow. In most situations, this is a straightforward disclosure, and Sorpaid's template accommodates this quite simply. However, in situations  where there are acquisitions/disposals of subsidiaries, new finance leases, fair value movements, foreign exchange  movements , other non cash movements, and other situations described at 14.7A and 14.7B in para   4.9 of the bulletin, additional work is required to comply with the requirements.  

     4. Rules relating to the exclusion of subsidiaries from consolidation

     5. Intangible assets acquired in the acquisition of non charitable subsidiaries

     6. Consolidation of special purpose entities

     7. Some of the items in the second category have minor implications for disclosure.

These are the areas that are included in the latest Sorpaid templates

Rules about how the underlying figures are arrived at

The second category covers  :-

  • When Gift Aid from subsidiaries is recognised in the accounts.
  • Removing exemptions that permit aggregating different types of assets with different depreciation rates
  • When after date payments of gift aid from subsidiaries are to be treated as post balance sheet adjusting events.
  • Measurement values of properties let to other group members
  • Including the transfer of activities to a subsidiary undertaking as an example of a charity reconstruction that should be accounted for as a merger
  • Inserting a definition of the term service potential
  • Treatment of financial instruments.
  • Valuation of heritage assets
  • Accounting for social investments


The consolidated SORP can be downloaded from :-


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