The Charity Commission has released an important update on forthcoming changes to the Charities SORP 2026, including reflections from their recent consultation, which will impact Sailfin’s charity clients.
Key Charities SORP 2026 updates
The Charities SORP-making body has reviewed feedback from nearly 150 individuals and organisations, preparing to finalise the new SORP (Statement of Recommended Practice) for release this October. Charities should be ready for a number of critical changes coming from the UK accounting standard, FRS 102, which the SORP cannot override.
What will change
- Leases on the Balance Sheet: All lease arrangements now must be included on balance sheets, unless specific exemptions apply.
- Revenue Recognition Model: A new five-step revenue recognition model will need to be adopted for income from exchange contracts, requiring charities to review their processes and income sources.
Helpful guidance is available, and Sailfin clients should ensure their finance teams are familiar with these compulsory changes.
Tiered reporting framework
There is broad support for moving to a three-tier reporting framework:
- 89% of consultation respondents backed this approach.
- The exact income thresholds are still under consideration, with calls to raise tier levels and clarify their relationship to audit limits.
- The SMB is focused on keeping the system simple and clear, recognising jurisdictional differences.
Trustees’ Annual Report
Module 1, covering the Trustees’ Annual Report, was positively received for:
- Prompt questions
- Sustainability and enhanced reserves disclosures
The Commission notes the need to balance compliance with meaningful reporting, avoiding burdens on smaller charities or unnecessary “tick-box” exercises.
Technical modules and complexity
Feedback requested that modules such as lease accounting, income recognition, and social investments be clear and accessible. The Charity Commission is working to provide more user-friendly support materials so Sailfin clients can navigate these evolving requirements confidently.
Next steps to prepare for the Charities SORP 2026
Final revisions to SORP are underway and will be submitted to the Financial Reporting Council soon. The process aims for clarity, consistency, and transparency, helping charities maintain trust and communicate their impact effectively.
Sailfin is committed to providing ongoing support and guidance as these updates come into force. Charity clients are encouraged to review internal processes, monitor announcements in October, and reach out for assistance preparing for SORP 2026 compliance.
For more support, please contact us about our charity governance consultancy support.