Goodbye to SORP 2005
December 18, 2014
What is happening?
The framework of requirements for the accounts of Charities has been a constant for the last nine years, as set out by SORP 2005. Now this is changing. Accounts prepared for years beginning on, or after 1st January 2015 must comply with the new FRS 102, or FRSSE (if appropriate).
Firstly – the terminology:
- SORP is a Statement Of Recommended Practice
- FRS is Financial Reporting Standard
- FRSSE is Financial Reporting Standard For Smaller Entities.
They set out the requirements that the accounts of an organisation must meet.
What are the changes?
The first decision an organisation must make is whether to prepare accounts that comply with the new FRS 102, or, (if the organisation satisfies the criteria of a ‘smaller entity’) it may choose to prepare accounts in accordance with the FRSSE.
How do FRS 102 and FRSSE differ?
Largely these accounting standard statements have a format that requires common disclosure, for example, that:
• All Trustees must be listed
• Must disclose if no Reserves Policy, with reasons
• Risk disclosure modelled on Strategic Report
• Remuneration policy of senior staff
However, there are significant differences.
FRSSE requires fewer disclosures than FRS 102, and no Cash-flow statement.
Who can help?
Those preparing an organisation’s accounts must also note that the FRSSE will be replaced within one year. A future FRSSE might be as a special section of FRS 102 with fewer disclosures required.
If you need help to ensure that your accounts have the correct format, make all the necessary disclosures, and comply with the Accounting Standards, or if you have any questions regarding these changes, contact Right Balance Accounting on 01768 800350. We can help.
Alan Stubbs FCMA