Archive for the ‘SORP2015’ Category

Something to think about when writing next years trustee report

Posted on: February 19th, 2019 by Sarah Case No Comments

The Trustees report can be seen as a window to the world, it’s a public available document that is required to meet many disclosure requirements to be compliant with the SORP.

Since SORP 2015 placed more emphasis on certain areas of the report, we have seen charities more comprehensively reporting activities and achievements.  However, there is a distinct lack of emphasis based on the reporting of the difference those activities and achievements have made.  When Charities are able to report the difference they make, they bring in an element of accountability into their reporting. (more…)

SORP 2015 bite size guidance: Charities that are also Companies

Posted on: March 9th, 2015 by Claire Thompson No Comments
Claire Thompson, Charities and Not for Profit Assistant Manager, MHA Broomfield Alexander

Claire Thompson, Charities and Not for Profit Assistant Manager, MHA Broomfield Alexander

Welcome to our series on SORP 2015 where the specialist charities and not for profit team at MHA Broomfield Alexander will bring you bite size guidance on the changes that SORP 2015 will bring to your organisation.

Directors Report:

A combined directors and trustees report can be prepared provided it includes all information required by the SORP module and applicable charity law. Charitable companies should ensure that the combined annual report makes it clear that is also contains a directors report as required by company law.

Charitable companies which are medium or large must also prepare a strategic report.

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SORP 2015 bite size guidance: Statement of cash flows

Posted on: March 5th, 2015 by Joanne Taylor No Comments
Joanne Taylor, Senior Charities & Not for Profit Manager, MHA Broomfield Alexander

Joanne Taylor, Senior Charities & Not for Profit Manager, MHA Broomfield Alexander

Welcome to our series on SORP 2015 where the specialist charities and not for profit team at MHA Broomfield Alexander will bring you bite size guidance on the changes that SORP 2015 will bring to your organisation.

Charities preparing their accounts under FRS102 generally must provide a statement of cash flows (there are a few exemptions available – see section 7.1a FRS102).

The statement of cash flows provides information about the ways in which a charity uses the cash generated by its activities and about the changes in cash and cash equivalents held by the charity.  The statement also provides information on the charities liquidity and solvency.

The statement of cash flows must analyse three standard headings; operating activities, investing activities and financing activities.  The statement will also include the cash balances of unrestricted funds, restricted funds including endowment funds.  Charities can use either the direct or indirect method when presenting their cash flows.

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SORP 2015 bite size guidance: Events after the accounting period

Posted on: March 2nd, 2015 by Sarah Case No Comments
Sarah Case, Director, MHA Broomfield Alexander

Sarah Case, Director, MHA Broomfield Alexander

Welcome to our series on SORP 2015 where the specialist charities and not for profit team at MHA Broomfield Alexander will bring you bite size guidance on the changes that SORP 2015 will bring to your organisation.

When preparing accounts you would tend to make estimates and judgements based on the facts you have to hand at the time.  There is often a delay between making these decisions and the formal approval of the accounts by the board.  At this time those judgements should be reconsidered bearing in mind the facts held at that later date.

Events that occur after the year end can fall into two categories, adjusting and non adjusting.

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SORP 2015 bite size guidance: Impairment of Assets

Posted on: February 26th, 2015 by Claire Thompson No Comments
Claire Thompson, Charities and Not for Profit Assistant Manager, MHA Broomfield Alexander

Claire Thompson, Charities and Not for Profit Assistant Manager, MHA Broomfield Alexander

Welcome to our series on SORP 2015 where the specialist charities and not for profit team at MHA Broomfield Alexander will bring you bite size guidance on the changes that SORP 2015 will bring to your organisation.

An impairment loss occurs when the carrying amount of an asset exceeds its recoverable amount.

At each reporting date the charity must assess whether there is any indication that an asset may be impaired.

The recoverable amount of an asset is the higher if its fair value less costs to sell the asset and its value in use.

Indicators of impairment may include:

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SORP 2015 bite size guidance: Accounting for financial assets and financial liabilities

Posted on: February 23rd, 2015 by Joanne Taylor No Comments
Joanne Taylor, Senior Charities & Not for Profit Manager, MHA Broomfield Alexander

Joanne Taylor, Senior Charities & Not for Profit Manager, MHA Broomfield Alexander

Welcome to our series on SORP 2015 where the specialist charities and not for profit team at MHA Broomfield Alexander will bring you bite size guidance on the changes that SORP 2015 will bring to your organisation.

All charities are likely to have financial assets and financial liabilities, examples include investments in shares, bonds, debtors, cash, loans, overdrafts and creditors.

Charities normally measure a basic financial asset or liability at its initial recognition at the amount receivable or payable including any related transaction costs.  However, if initially measured at fair value, transaction costs are not included and are treated as an expense.

Similarly if an arrangement fee is charged on a loan to the charity and it is material, it must be treated as a deduction from the amount of principal advanced.  The will effect the amount of interest charged over the terms of the loan.

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SORP 2015 bite size guidance: Balance Sheet

Posted on: February 16th, 2015 by Sarah Case No Comments
Sarah Case, Director, MHA Broomfield Alexander

Sarah Case, Director, MHA Broomfield Alexander

Welcome to our series on SORP 2015 where the specialist charities and not for profit team at MHA Broomfield Alexander will bring you bite size guidance on the changes that SORP 2015 will bring to your organisation.

Section 10 of the new SORP sets out the structure of the Balance Sheet and the headings, classifications and disclosures for the fixed assets, current assets, liabilities and funds of the charity.

Very little has changed in the SORP for the balance sheet items although a potentially significant change is that certain assets are now required to be valued at fair value as opposed to market value.

Heritage assets are dealt with in their own separate module and if you don’t have them you are able to customise your SORP to remove that section and therefore some technical reading time.

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SORP 2015 bite size guidance: Disclosure of trustees & staff remuneration, related party and other transactions

Posted on: January 15th, 2015 by Joanne Taylor No Comments
Joanne Taylor, Senior Charities & Not for Profit Manager, MHA Broomfield Alexander

Joanne Taylor, Senior Charities & Not for Profit Manager, MHA Broomfield Alexander

Welcome to our series on SORP 2015 where the specialist charities and not for profit team at MHA Broomfield Alexander will bring you bite size guidance on the changes that SORP 2015 will bring to your organisation.

The new SORP and its predecessors recognised that the disclosure of certain transactions are important within a charity for stewardship purposes  and also for providing assurance that the charity is operating for the public benefit and that its trustees are acting in the interests of the charity and not for private benefit.

The new SORP requires that disclosures must be made for transactions involving trustees, de-facto trustees, related parties, staff remuneration and ex-gratia payments and must  always be regarded as material regardless of size.

Much of this guidance is not new, but the new SORP provides more detailed guidance to address issues that have arisen since the last in SORP 2005.

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SORP 2015 bite size guidance: Allocating Costs by Activity

Posted on: January 12th, 2015 by Claire Thompson No Comments
Claire Thompson, Charities and Not for Profit Assistant Manager, MHA Broomfield Alexander

Claire Thompson, Charities and Not for Profit Assistant Manager, MHA Broomfield Alexander

Welcome to our series on SORP 2015 where the specialist charities and not for profit team at MHA Broomfield Alexander will bring you bite size guidance on the changes that SORP 2015 will bring to your organisation.

In this blog post we look at how costs should be allocated by activity in the Statement of Financial Activities (Module 8) – note that the approach taken to this topic is the same in both SORPs.

General Principles:

The SOFA must distinguish between expenditure incurred on charitable activities which contribute to furthering the charity’s aims and purposes and those undertaken to raise funds.

A charity’s SOFA or related notes should provide an analysis of a charity’s significant activities in a way that is relevant to both the charity and the user of the accounts.

Significant activities are those which due to their scale or importance are key to the charity in meeting its aims and objectives. The activities should also be consistent with the significant activities noted in the trustees’ annual report.

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SORP 2015 bite size guidance: Disclosure of provisions and funding commitments in the accounts

Posted on: January 8th, 2015 by Sarah Case No Comments
Sarah Case, Director, MHA Broomfield Alexander

Sarah Case, Director, MHA Broomfield Alexander

Welcome to our series on SORP 2015 where the specialist charities and not for profit team at MHA Broomfield Alexander will bring you bite size guidance on the changes that SORP 2015 will bring to your organisation.

This section requires the charity make a number of disclosures that ensure future commitments are transparent to the reader.

Charities must disclose in the notes to the accounts a reconciliation of the movements in provisions and funding commitments, along with a brief description of the nature of the provision or commitment.

Charities must also disclose funding commitments that are not recognised as a liability or a provision, including details of the commitment, time frame, performance related conditions and how the commitment will be funded.

The SORP does not require comparatives for these disclosures.

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