On 18th June a new consultation was opened on proposed changes to the new SORPs.
The new SORP (FRSSE) will be withdrawn for accounting periods commencing on or after 1st January 2016, after just one year of existence, due to the FRSSE itself being withdrawn from that date. The new consultation looks at what will happen as a result, with a final new version expected to be ready by March 2016.
Further SORP evolution Ian Huggett The big news is that the SORP board are not proposing to replace the SORP (FRSSE) with anything at all, so from 1st January 2016 all charities will move to the SORP (FRS102) which currently applies only to charities with gross income in excess of £6.5million.
This would mean that all charities preparing accruals accounts would need to prepare a Cash flow Statement. However it is proposed that this requirement will only apply to those charities which are defined as “larger charities”.
Up until now the SORP has defined a larger charity as one requiring a statutory audit. With the increase in the audit threshold from gross income of £500,000 to gross income of £1million, it is proposed that the definition of a larger charity is changed to keep it at the £500,000 gross income level.
One result of this is that for one year only some charities might cease to need to include the larger charity disclosures in their accounts and Trustees’ Reports. Trustees will need to make a decision on that point.
The other point to watch is to make sure that your charity has the information it will require to prepare a Cash flow Statement, not just for the first year under the new standard, but for the current year as well, because when the Cash flow Statement is prepared it will require comparative figures.
To keep on top of the changes, look out for future newsletters and visit the Thomas Westcott website where we will post details of changes as they are confirmed.
By Ian Huggett, Partner and member of both the Charity and non-profit Team and Property and Construction Team
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