The most significant changes in the revised SORP include a proposed tier model for categorisation of charity size, expanded requirements for the Trustees Report, a new ‘5 step model’ for revenue recognition and changes to lease accounting which will now require to be recognised on the balance sheet.

A public consultation period designed to gather opinion on the key changes in the revised SORP concluded last month.

Rory McCall, director, audit at Wbg, said: “As anticipated, one of the common themes arising from the consultation responses is the increased reporting burden and costs the changes are likely to bring to charities.

“Many charities already place significant reliance on their accountant or auditor to help comply with financial reporting requirements, and many of the proposed changes are sufficiently complex such that this reliance will only be increased going forward.”

He noted that Christine Scott, head of charities and reporting at ICAS, has stated that there is scope for the Charities SORP-making body to improve the drafting changes in areas such as the trustees’ annual report requirements, and the revenue and lease accounting requirements. And that changes to the drafting, even where FRS 102 predetermines the requirements, would make compliance easier for charities.

Feedback from a recent webinar between Wbg and its partner The Scottish Council for Voluntary Organisations (SCVO) found similar themes and noted the significant compliance burden on smaller charities.

“The revisions will be challenging for many charities to comply with, particularly smaller charities with less available resources,” said Mr McCall.

“Some of the changes, particularly surrounding lease accounting and revenue recognition, are technically complex.”

He added that clearer application guidance aimed at smaller charities may help reduce this burden, though there are options available to the SORP-making body such as taking smaller charities out of the scope of some of the charity specific requirements by revising the proposed tier thresholds.

Mr McCall advises charities to watch for the publication of the final version of the SORP, expected to be issued this autumn.

“Charities should aim to read the requirements thoroughly and understand the changes, start gathering information and identify where specialist support may be required to plan for its introduction in 2026,” he said.