SORP Accounts

Model Accounts

Here we refer to the two sets of model accounts produced by a task group at Church House for the smaller and larger churches.

At the recent training day, treasurers asked whether the reference to the 1993 Charities Act was still appropriate, now that a 2006 Act has been published. The Finance Officer has been advised that any references to the 1993 Charities Act should remain as the 2006 Act is not a consolidating Act.

The other question raised on the' FULL ACCOUNTS URC'  was whether the taxation note was still applicable. Again I have been advised that the note should remain.

It is expected that these 'model accounts' will be updated in due course, but until they are, the current form of accounts needs to remain.

Pro forma SORP Account formats for Smaller and larger Churches

SORP stands for ‘Statement Of Recommended Practice’ and is the accounting format which is recommended for use by Charities

All charities must prepare annual accounts and most have to, and all should, prepare trustees’ annual reports. This page summarises the guidance and help available on our website to assist those preparing of charity accounts:

What needs to be prepared?

The Charity Commission Guidance Charity Reporting and Accounting: The essentials (CC15) sets out the accounting requirements for different sizes and types of charities when preparing accounts and reports for financial years commencing between 27th February 2007 and 31st March 2008 inclusive.

New Thresholds have been announced please consult the information Below

New Thresholds

Church treasurers should have received the recent ACAT update, Volume 4,issue 10 which advises Charities that a number of accounting thresholds have changed.

The major change is in the threshold for the preparation of financial statements on the accruals basis; this increases from £100k (gross income) to £250k. This will enable all but a few larger churches to use the simpler'Receipts and Payments' basis for accounts preparation.

Another change affects churches with significant total assets in that the audit threshold has been increased from 'Assets in excess of £2.8mill and income in excess of £100k'[ to ' Assets in excess of £3.26mill and income in excess of £250k'

For financial years commencing on or after 1st April 2008, please refer to Charity Reporting and Accounting: The essentials April 2008 (CC15b).

Guidance for non-company charities with an income £100,000 or less

Receipts and Payments Accounts Pack (CC16)

Small non company charities that have an income of £100,000 or less can choose to prepare receipts and payments accounts (the simplest form of accounts). This pack provides a template for the layout and content of the trustees’ annual report and accounts and provides a simple approach for small charities who do not wish to prepare full accrual accounts.

Charities wishing to produce accruals accounts are encouraged to use the Accruals Accounts Pack (CC17).

The National Church has prepared proformas for both Accruals based accounts and receipts and payments type accounts. These are downloadable from this website at ………..

Independent Examination

Advice on appointing an independent examiner, the duties of an independent examiner and preparing an independent examiner’s report. Refer to Independent Examination of Charity Accounts PDF: Trustess (CC31) and Independent Examination of Charity Accounts PDF: Examiners (CC32).

For accounting years beginning on or after 1 April 2008 those small charitable companies which are not required to have an audit may opt for independent examination. Independent examiners also have a new duty to report matters of material significance to the Commission from 1 April.  Revised guidance CC31 - Independent Examination of Charity Accounts is due for publication in early May. It explains for trustees what an independent examination is and how to go about selecting your examiner. For examiners the guidance sets out what you have to do and how to go about making your examiner’s report with plenty of worked examples and practical advice. The guidance will also explain the new duty to report to the Commission with worked examples.

Guidance for non-company charities with an income exceeding £100,000

Accruals Accounts Pack (CC17)

Small non company charities that are below the audit threshold (gross annual income over £500k or total assets of more than £2.8m) can use this pack when preparing their accounts on an accrual basis. The pack provides a template for the layout and content of the trustees’ annual report and accounts.

Charities preparing accruals accounts are encouraged to be familiar with the SORP and knowledge of the SORP is essential if the Accruals Accounts Pack (CC17) is not being used.

The SORP and guidance for larger non-company and company charities

Company charities prepare accounts on an accruals basis and therefore are required to use the SORP. The Example Trustees’ Annual Reports and Accounts (SORP 2005) include two worked small company examples. Non-company charities prepared on an accruals basis are required to use the SORP.

The Statement of Recommended Practice : Accounting and Reporting by Charities

The Charities’ Statement of Recommended Practice (Charities SORP) provides recommendations for the format and content of charity reports and accounts. It applies to charities that prepare accruals accounts to give “a true and fair view.” As well as the Charities SORP this page provides further links that may be helpful to preparers of accounts.

SORP 2005

Charities with an accounting period beginning on or after 1 April 2005 should refer to SORP 2005.

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