Charity accounts are changing in line with the adoption of newer, more open accounting standards.
Regulators have published draft details of some of the key points arising from a public consultation.
After analysing nearly 180 consultation responses, regulators the Charity Commission for charities England and Wales and the Office of the Scottish Charity Regulator have decided the new rules will:
- Require all charities filing accruals accounts to disclose senior staff pay in bands over £60,000, with larger charities to disclose their pay and remuneration policy for senior staff in their report.
- Clear signposting where charity accounting rules ask for more information than general accounting standards to meet charity law and the public interest.
- New guidance on the accounting treatment of legacy income, the Gift Aid scheme and on how to combine the strategic report made by medium and large charitable companies with the trustees annual report.
- Two accounting guidelines will let charities choose the standards they follow and help them produce their accounts by concentrating on the information required and not having to include unnecessary data
The new accounting rules for charities will come as a statement of recommended practice (SORP) that details the accounting rules they should adopt.
Sam Younger, who jointly chairs the SORP Committee and is chief executive officer at the Charity Commission said: “We are delighted that the draft SORP was so warmly welcomed by the charities and we are confident that this successful consultation means the sector will get a SORP that works with them – particularly now that there will be two SORPs which allows for the specifics of different accounting standards.
“We have valued the expert contributions during the consultation because of the specialist area that is charity accounting. In a number of ways, what the SORP asks of charities exceeds general accounting standards and we should be proud of this higher expectation. After all, the public have high expectations of charities – and its quality financial reporting and accounting are essential to maintain their trust and confidence in the sector.”
For more information, please contact our expert, Heather Beckworth