New look for SORP.
The Charity Commission this week launched the exposure draft of the revised charities Statement of Recommended Practice which gives advice for best practice in preparing accounts. The SORP has been in existence since 1995, but inconsistencies have allowed people to use different treatments. The review was intended to bring it into line with developments in financial reporting standards. The main change in the exposure draft is a proposal for the Statement of Financial Activities to reflect the economic reality of a charity’s activities. The draft has also been updated for new accounting standards and aims to clarify many of the accounting requirements such as accounting for legacies, gifts in kind and the rules surrounding the disclosure of grants paid. Stephen Burgess, charities director of Saffery Champness, said: ‘It is welcome and clarifies a number of things. But I am concerned that it is longer than the previous one and I hope it doesn’t put charities off.’ Charity commissioner John Bonds, chair of the SORP committee, said: ‘The revised SORP will be simpler for charities to use. The draft may appear longer but it is also clearer: few charities, if any, will have to take account of all its requirements.’ Comments should be submitted to the commission by 13 March 2000.