The ‘Statement of Recommended Practice: Accounting and Reporting by Charities’ (‘the SORP’) ensures consistency and transparency across the sector, making charity accounts comparable, understandable and useful for donors, beneficiaries, and the public alike.
It has been updated following an extensive development process informed by the views of engagement partners and a sector specific SORP Committee.
The SORP-making body is now inviting comments on the draft as the feedback will help shape the final version, which is expected to be published in autumn 2025 and effective from January 2026.
The SORP has been updated to reflect changes introduced by the Financial Reporting Council (FRC) to FRS 102, the Financial Reporting Standard applicable in the UK and Republic of Ireland – and in particular to reflect changes to how charities will need to recognise certain types of income and certain types of leases in their accounts. The consultation is seeking views on how the revised requirements are explained in the context of charities. Charities are also encouraged to ready themselves for these two changes, the substance of which is already decided.
Improvements are also proposed in other areas that are within the discretion of the SORP-making body. These are to make the SORP more straightforward to navigate for charities, and to improve information for beneficiaries, donors and the public about how charity resources are stewarded. These proposed changes include:
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introduction of 3 tiers based on income levels to ensure proportionate reporting, whilst also meeting the information needs of users
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advancing reporting in important areas such as impact reporting, reserves, going concern and volunteers
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introduction of proportionate reporting for environmental, social and governance issues.
The SORP-making body is keen to hear the views of charities, preparers, auditors and independent examiners of charity accounts, trustees, employees and beneficiaries of charities and others who may use charity accounts including donors, funders, financial supporters and other stakeholders.
The consultation on the ‘Exposure Draft of the Charities Statement of Recommended Practice: Accounting and Reporting by Charities’ will run from 28 March 2025 for 12 weeks.
The joint SORP-making body comprises the Charity Commission for England and Wales, the Office of the Scottish Charity Regulator and the Charity Commission for Northern Ireland. The Charities Regulator for the Republic of Ireland is an observer on the SORP-making body.
Charity Commission for England and Wales Chief Executive David Holdsworth CEO, said:
Some charities have to prepare accounts using the Charities SORP, whilst others choose to do so. The framework promotes transparency and accountability over the stewardship of the resources charities hold, which is vital to public trust and confidence in the sector. This new draft has been developed through extensive engagement with experts including through the SORP Committee, and can be improved further through this formal consultation. I really encourage charities and others with an interest or experience to give us their feedback.
Charity Commission for Northern Ireland Chief Executive, Frances McCandless, said:
The SORP plays a crucial role in setting accountancy standards for charities. To ensure it evolves to meet modern expectations and supports those preparing, reviewing, and reading charity accounts, we need your input. This consultation is a key opportunity for those who use the SORP to shape its future. With implementation approaching in January 2026, and as FRS 102 will not be changing, now is also the time for charities to start thinking about how they can be ready to report under the new standards.
Scottish Charity Regulator (OSCR) CEO, Katriona Carmichael, said:
The Charities Statement of Recommended Practice (SORP) helps promote trust and confidence in charities by enhancing transparency and accountability of how a charity’s resources are managed. The Exposure Draft SORP has been developed by experts in charity finance to ensure that charities can keep up with developments in modern financial reporting. It’s with this in mind that I’d encourage charities applying the SORP and others to contribute to this consultation process, and take action now to prepare for the upcoming changes in accounting standards that are reflected in the Exposure Draft SORP.
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Notes to editors
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More information about the Charity SORP, including the consultation on the ‘exposure draft’, can be found at https://www.charitysorp.org/
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The Charity SORP applies to charities preparing accruals accounts under UK-Irish Generally Accepted Accounting Practice (GAAP). The SORP provides guidance on FRS 102 the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102), as well as setting out sector specific requirements. More information about FRS 102 can be found here
