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Two SORPs for the price of one


July saw the issue of two new charity SORPs to replace the current version. This article explains: why there are two SORPs; and the main changes.


The two new SORPs were published in July 2014 by the joint SORP making body, the Charity Commission and the Office of the Scottish Charity Regulator (OSCR). The new SORPs apply to financial years beginning on or after 1 January 2015 and will replace the existing SORP.


Why two SORPs?


The current FRSSE is a simplified version of current UK GAAP, so many of the accounting principles and treatments are the same. However, with the advent of FRS 102 that is no longer the case. Under FRS 102 there will be changes in terminology, accounting treatment and the amount and nature of information that must be disclosed in the accounts. The extent of the differences is such that a different SORP was required for each accounting standard; hence the FRS 102 SORP and the FRSSE SORP.


The two SORPs have the same basic requirements as the form and content of the trustees report and accounts; however, there are differences where the accounting treatments differ between the FRSSE and FRS 102. A good example is the treatment of realised and unrealised gains and losses on investments. A further reason is that the FRSSE’s days are numbered. By having two separate SORPs the FRSSE SORP could be withdrawn or amended without disturbing the FRS 102 SORP.


What has changed?


Before looking at what has changed, it should be noted that the big picture is relatively unchanged. The focus on a charity telling its own story in the trustees report, with the activities discussed in that report flowing through to the analysis in the SoFA, remains. Fundamental areas such as fund accounting are also unchanged. What, then, are the major differences between the SORP 2005 and the FRS 102 SORP?








The FRSSE SORP follows the FRS 102 SORP except where there are differences in the accounting treatment required by the underlying standards.