Charities SORP (FRSSE)

cover - SORP FRSSE


The Charities Statement of Recommended Practice (SORP): Accounting and Reporting by Charities provides guidance for charities preparing accounts on an accruals basis. The Charities SORP (FRSSE) is one of two new SORPs developed and supports the Financial Reporting Standard for Smaller Entities (FRSSE). The FRSSE SORP may be followed, in general, by charities meeting small company criteria although there are some exceptions. Note that all charities apart from those required to follow other SORPs can opt to follow the FRS 102 SORP.

Charities opting to follow either SORP should consider the guidance on the Charities SORP website and if necessary, take their own professional advice.




Aug 2014


Charity Commission/OSCR


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Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard for Smaller Entities (the FRSSE) (effective 1 January 2015).

The Charities SORP (FRSSE) supports the Financial Reporting Standard for Smaller Entities (FRSSE). In general, charities, including non-company charities, that would qualify as a small company or fall within a small group had they been incorporated in company law, may apply the FRSSE. However some entities are excluded from applying the FRSSE (see the Charities SORP website). Note that all charities apart from those required to follow other SORPs have the option to adopt the Charities SORP (FRS 102). The new Charities SORPs apply to financial years beginning on or after 1 January 2015. 

While the Charities SORP (FRSSE) shares some of the same requirements as the Charities SORP (FRS 102) there are a number of areas where the two SORPs are different as one is based on the FRSSE (ie 'old' UK GAAP) and the other on new UK GAAP in FRS 102.

The Charities SORP (FRSSE) introduces a number of important changes including:

  • a revised Statement of Financial Activities including amendments to headings and a ‘plain language’ style
  • recognition of donated goods for resale or distribution
  • an estimation technique for donated items for sale under the UK retail gift aid scheme
  • accounting for social investments
  • more guidance on the accounting treatment for charities that invest in permanently endowed funds on a total return basis
  • clarification that incorporated charities are specifically prohibited from being treated as branches
  • new guidance and criteria for the use of merger accounting.

For more information on choosing the SORP for your charity see the SORP website, where a PDF version can also be downloaded.