SORP: Have your say
The SORP-making body has issued an invitation to comment – have your say on the SORP.
This consultation on the charities SORP (FRS 102) is led by CIPFA, the Charity Commission, and the Scottish Charity Regulator, which constitute the charity SORP-making body. The consultation, published on 4 May 2016, is in preparation for the SORP’s 2019 update. With the current SORP only coming into effect from January 2015, it may seem early to judge whether it is an improvement on the last. Nonetheless, the SORP is now going to be reviewed on a triennial basis and research is starting early.
The consultation closes on 11 December 2016. ACF intends to make a submission based on feedback from members. If you wish to express your views, send your thoughts to firstname.lastname@example.org and copy in email@example.com by 18 November 2016 and we will include them in our response. Alternatively, you can respond to the invitation to comment directly.
More information, including the specific questions and proposed changes, can be found by clicking here.
What is the SORP?
The SORP sets out requirements and guidelines that are unique to charities in preparing their accounts in accordance with Financial Reporting Standard 102 (FRS 102). It aims to cover areas which for-profit companies and government organisations do not have to consider, such as unrestricted and restricted funding, and a narrative trustee report which ‘tells a story’.
How are foundations affected?
Foundations are doubly affected by the SORP. As charities themselves, foundations must prepare their accounts in accordance with SORP requirements. But foundations also form part of the main audience of charity accounts.
Some questions might affect you in both roles. Would a key facts summary be helpful? Is listing support costs useful, either in their current form or in any form? Do the current requirements on reserves policy meet your needs?
Some issues affect grant-makers in particular ways. Do you find that current requirements are appropriate for grant-making organisations? What do you think about the proposed requirement to report by country your charitable expenditure (including grants)? What would the impact be of the proposed identification of significant individual or corporate donors, which would include living donors?
Other areas of the SORP affect grant-makers as readers of charity accounts. Do current requirements provide you with the information you need? Is there any information missing that you would like to be made available? Could the guidance or its definitions be clarified to make accounts easier to understand?
These are just suggestions as to how foundations may be concerned; in reality, it will all affect foundations in one way or another. ACF therefore believes it is a vital opportunity to maintain the requirements that are helpful and to change or remove the ones which are not.
We look forward to hearing from you.