What is the SORP Consultation? Why does it matter? And why and how should you get involved? Richard Sagar, Head of Policy, CFG, answers these questions and more.
The Exposure Draft SORP is almost four weeks old. Launched on 28 March, the consultation on the ‘Exposure Draft of the Charities Statement of Recommended Practice: Accounting and Reporting by Charities’ runs for 12 weeks, closing on Friday 20 June.
The consultation sets out proposals for accounting and reporting by charities in the context of the updated FRS 102 (The Financial Reporting Standard applicable in the UK and Republic of Ireland) for financial years beginning on or after 1 January 2026.
The SORP-making body (the relevant charity regulators) is seeking stakeholder views on key areas of change which will inform the final SORP.
If you prepare, audit or otherwise use charity accounts, we urge you to read the consultation. At more than 200 pages, there's a lot to absorb, but help is on hand! Alongside our members and partners, CFG's policy team is now working through the finer details of the document and we'll be sharing them with you.
In May, we'll be running four, free-to-attend, online consultation sessions, in partnership with our corporate partners. These sessions will give us the opportunity to share with charities large and small what could change, and what is largely staying the same and, most importantly, gather your feedback and insights. We want this consultation to be truly charity-led.
There are several significant proposed changes charities should be aware of. These include:
- The introduction of tiering. The proposed tiering will be based on income, with three distinct tiers.
- Tier 1 - all charities applying accruals accounts and with a gross income of not more than £500,000 (€500,000).
- Tier 2 - all charities with a gross income falling above the tier 1 threshold and with a gross income of not more than £15 million (€15 million).
- Tier 3 - all charities with a gross income falling above the tier 2 threshold.
- New disclosure requirements in the Trustees Annual Report. This includes impact, volunteering and sustainability reporting.
- Changes to modules on recognition of income, including legacies, grants and contracts income. This is in line with changes to FRS102.
- A new module on Lease Accounting, again in line with changes to FRS102.
- A number of other changes relating to recognition of expenses, allocating costs by activity in the Statement of Financial Activities, provisions, contingent liabilities and contingent assets and accounting for social investments.
CFG will be extensively engaging with charities to help inform our response including consultation events, surveys and our Technical Accounting Forum. If you're unable to attend any one of our four, free online sessions, please share your views via email.
The Policy Team will be collating all views and insights to inform our consultation response, however we urge you to submit your own response too.
This will be our only chance in the several years to shape this important document. Let's not miss this opportunity - engage!
Forthcoming consultation events
In May 2025, CFG will be hosting four online free-for-members consultation meetings, alongside our trusted partners. This is your opportunity to input into the consultation and shape the SORP. For the details and dates of the meetings see below:
Wednesday 7 May
SORP 2025 Consultation - Session 1
Thursday 8 May
SORP 2025 Consultation - Session 2
Wednesday 14 May
SORP 2025 Consultation - Session 3
Monday 19 May
SORP 2025 Consultation - Session 4
All the meetings will follow the same format, so you only need to sign up to and attend one event. To book or find out more, visit one of the links above.
P.S. If one consultation isn't enough for you, please take a look at my update on the financial thresholds consultation. We need your views on this one too!