A public consultation on the updated charities SORP (Statement of Recommended Practice) is now live and will run from 28 March to 20 June 2025. The SORP sets out how charities should prepare accrual accounts, and this latest version has been updated after a wide-ranging review involving sector experts and the SORP Committee.
What are the updates?
The main updates reflect changes made by the Financial Reporting Council (FRC) to FRS 102, especially in two key areas:
- Revenue recognition
- Leases
These updates have already been agreed, but the consultation is looking for feedback on how they are explained for charities.
Other proposed changes aim to make the SORP easier to use and improve transparency in areas such as:
- Impact reporting
- Reserves and going concern
- Volunteer involvement
- Environmental, social, and governance (ESG) issues
New tiered reporting system
A major proposed change is the introduction of three reporting tiers based on income, to help tailor reporting requirements:
- Tier 1 – Income up to £500k
- Tier 2 – Income between £500k and £15m
- Tier 3 – Income above £15m
This change aims to simplify things for smaller charities, but it does add some complexity as different rules will apply depending on a charity’s income. These new tiers won’t affect audit thresholds or the use of receipts and payments accounting—they’re just for reporting purposes.
What’s next?
There’s nothing you need to do right now. The consultation is ongoing, and the final SORP is expected around October 2025, with changes coming into effect from 1 January 2026. We’ll share updates once the final version is published.
