Charity Accounts
Annual charity accounts prepared to the Charities SORP.
Charity accounts must be prepared in accordance with the Charities Statement of Recommended Practice (SORP). The SORP requires specific presentation of restricted and unrestricted funds, a trustees annual report and a statement of financial activities. Getting this right matters: the Charity Commission publishes your accounts and they are publicly searchable.
2
Main fund types: restricted and unrestricted
SORP FRS102
Accounting standard for most registered charities
10 months
Filing deadline after financial year end
The problem
The challenges trustees face.
Fund accounting complexity
Charities must separately account for restricted funds (money given for a specific purpose), unrestricted funds and designated funds. Misclassifying a grant from a restricted to an unrestricted fund, or failing to track restricted fund expenditure, is a common error that examiners and the Commission look for.
Grant reporting obligations
Many funders require accounts prepared to the Charities SORP as a condition of grant reports. Accounts that do not clearly show how restricted funds were used can jeopardise future funding.
Trustees annual report
Larger charities must include a detailed trustees annual report covering activities, achievements, financial performance and future plans. Smaller charities still need a compliant report even if shorter. Trustees often underestimate what this requires.
Keeping up with SORP updates
The Charities SORP is updated periodically. Changes to accounting policies, disclosure requirements and reporting thresholds can catch trustees off guard if they are not monitored.
The work
How we help.
Prepare SORP-compliant accounts
We prepare your full charity accounts including the statement of financial activities, balance sheet, notes and cash flow statement (where required), structured correctly under the applicable SORP.
Fund reconciliation
We reconcile restricted, unrestricted and designated fund balances, track restricted fund income and expenditure, and ensure the accounts clearly show fund movements.
Trustees annual report
We assist trustees in drafting the annual report covering public benefit, activities, achievements and financial review, tailored to the charity's income band and Commission requirements.
FAQ
Common questions
- What is the Charities SORP and why does it matter?
- The Charities Statement of Recommended Practice (SORP) is the accounting standard that applies to charities in the UK. It specifies how income and expenditure should be classified, how funds should be tracked and what the trustees annual report must include. Accounts that do not follow the SORP will fail independent examination and Charity Commission scrutiny.
- What is a statement of financial activities?
- The statement of financial activities (SOFA) replaces the income and expenditure account in charity accounts. It shows all incoming resources, resources expended and transfers between funds, split between restricted and unrestricted funds. It gives a complete picture of how the charity's resources moved during the year.
Speak to a charity accounts specialist.
Tell us about your charity, CIC or social enterprise and we will arrange a short introductory call. No obligation.
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