Building on research, input and feedback from both the sector and the SORP Committee, which comprises charity regulators, auditors, finance directors and advisers, the revised SORP contains updated guidance for the preparation of charity accounts and trustee annual reports.

Key developments include:

• a new approach to the presentation of the Trustees’ Annual Report, stressing the reporting of activities, services, programmes and projects undertaken;
• an emphasis in the Statement of Financial Activities on the disclosure of the activities, services, programmes and projects undertaken;
• improved guidance on when transactions are recognised;
• accounting guidance for new developments such as programme related investments; and
• disclosure of grants made to institutions based on materiality principles

David Taylor, commissioner and chair of the SORP Committee, said: “SORP 2005 further hones charity reporting within existing principles. It helps charities explain what they aim to do, how they go about it and what they achieve, pulling together narrative and financial reporting, into a coherent outcome-focused package.”

The Charity Finance Directors’ Group (CFDG) has welcomed the changes, particularly because the revised SORP has taken on board many of the recommendations made in the group’s Inputs Matter publication. However, it believes that there is still more that can be done.

CFDG chief executive, Shirley Scott, said: “The aim of the SORP and of the Inputs Matter Report is to improve the quality of reporting in the charity sector so that all those engaging with the charity, whether as trustee, employee, funder or beneficiary, can fully understand what the charity does and how it acquires and uses the resources available to them. We believe that adhering to the new SORP will help charities to achieve that aim.

“Although we are disappointed that the requirements on heritage assets will not be changed, we welcome the fact that the consultation period gave the museums and gallery sector a chance to air their concerns about this issue and we hope that their comments will inform subsequent SORP reviews.”

SORP 2005 is now available from the Charity Commission website at www.charitycommission.gov.uk/investigations/sorp/default.asp