SORPs are guidelines recommending accounting practices for specialised sectorssuch as insurance and banking.
The ASB’s proposals are now available for public consultation and are set out ina supplement to the exposure draft FRED 21 ‘Accounting Policies’, originallypublished on 9 December 1999.
SORPs are not mandatory, but recommend accounting practices for specialisedsectors. They are usually issued to complement existing accounting standards orother legal and regulatory requirements.
One of the proposals suggested is that a business should assess whether acceptedindustry accounting practices are appropriate to their particular circumstances.
Another proposal suggests that businesses should make additional disclosures intheir accounts where a significant part of their activities falls within thescope of a SORP.There is often confusion as to which SORPs should be adhered to and whether ornot companies should comply with any at all.
‘The chances are companies are already complying with a particular SORP andtherefore may not need to comply with SORPs relating to all the differentindustries that entity is dealing in,’ said Phil Barden, project director at theASB.
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