Statement of financial activities

Charity accounts do not use a profit and loss account. The SoFA replaces it, and it does a job an ordinary income statement cannot.

The SoFA analyses income and expenditure across unrestricted, restricted and endowment funds, and shows the net movement in each. That column structure is what makes it possible to see whether the general funds are sustainable, separately from restricted money that is passing through.

It is required in accruals accounts under the SORP. Charities using receipts and payments prepare a simpler statement instead. See also balance sheet.