What do we actually have to do differently under the new SORP?

England and Wales: this page sets out the position in full. Scotland: the SORP applies identically, but Scotland’s own threshold changes moved on a different basis and a different date, so the collision with the SORP date looks different from the England and Wales one — see below. Northern Ireland: the SORP applies identically, and there has been no Northern Ireland threshold change at all, so the SORP’s own date is the only one that matters here.

Which of your years does the new Charities SORP first affect?

The new Charities SORP (Charities SORP 2026) applies from the first reporting period that begins on or after its start date. It applies identically in England and Wales, Scotland and Northern Ireland. The statutory thresholds do not: they changed on different bases, and not at all in Northern Ireland.

This is the last page in the hub. It assumes the year-end cycle, up to approve and sign the accounts, is familiar, and maps what changes in it.

So the treasurer and trustees have three separate questions to answer, not one. For the same charity, in the same year, they can have three different answers:

• whether the new SORP applies to this year
• whether the new England and Wales statutory thresholds apply
• for a Scottish charity registered with OSCR, whether the new Scottish thresholds apply

Set your financial year end is where you work this out for your own charity. The three rules use different bases:

• the SORP attaches to when your reporting period begins
• the England and Wales threshold change attaches to financial years ending on or after 30 September 2026
• the Scottish threshold change attaches to when your period begins, on a different date again

Work it out from there rather than assuming a single “2026” date settles it. The 2026 threshold changes: what changed, what did not sets out the full collision table this hub built to answer that question. It does not need repeating here.

The practical effect is this. Take a charity whose year runs from October to September. It can be caught by the new statutory thresholds while still preparing its accounts under the outgoing SORP. That is because its reporting period began before the SORP’s own date.

Two charities with the same year end, one in England and one in Scotland, can end up on entirely different rule sets. The two nations’ threshold changes also use opposite bases.

The four workstreams: leases, income, reserves, transition

Once you know which rules apply to your year, four things change. Each has its own page, apart from the transition disclosures, which this page covers itself.

Leases. Right-of-use assets and lease liabilities go on the balance sheet for most arrangements that meet the definition of a lease. This applies whatever your tier, and only two narrow exemptions take one off it.

Do our office and equipment leases now go on the balance sheet? covers the method and the two exemptions. It also covers the knock-on to your audit determination and your reserves figure.

Income recognition. The SORP’s income module applies in full, whatever your tier. It is restructured around exchange and non-exchange income, and the five-step model now governs exchange income such as fees for services. Record your first restricted grant covers the mechanics for the case that trips people up most.

Reserves and going concern. The trustees’ annual report now has to do more than state a policy. The SORP requires its reserves figure to be consistent with the accounts. Where that is not evident, a reconciliation goes in the funds note or a separate note.

Update your reserves policy with Write your reserves policy. Once the lease exercise has changed your balance sheet, revisit assess going concern.

Transition disclosures. These belong to the year of change itself, and the next section of this page covers them.

Each of the first three is a page-sized job of its own. This page stays a map to them rather than repeating their content.

The transition disclosures themselves

Transition disclosures exist only in the year you switch. They have to be visible in the accounts, not just applied silently. The disclosures in the workstreams above are ongoing duties; these are not.

You do not restate comparative figures for leases. Instead, the cumulative effect of the change goes to opening reserves at the date of initial application. That is where your transition date sits.

Income recognition works differently. For the five-step model, FRS 102’s transitional provisions give a choice between that same cumulative-effect approach and full retrospective restatement of comparatives. Its lease provisions do not offer that choice.

Any practical expedients you use on transition have to be stated in the accounts, not just applied. They include:

• a single discount rate across a portfolio of similar leases
• near-term leases treated as short-term
• hindsight in working out lease term

What tiering does and does not relax

Tiering relaxes five modules only. Reading “small charity” as “lighter SORP” is tempting, but wrong. Every accruals charity, from Tier 1 (£500,000) through Tier 2 (up to £15,000,000) to Tier 3 above that, follows the same SORP.

Everything outside those five modules, including leases and income recognition, applies in full to every accruals charity whatever its size.

The five are the trustees’ annual report, the statement of financial activities, cost allocation, staff and related-party disclosures, and the statement of cash flows.

Cash flows is where a duty was lifted, and it was lifted from Tier 2. The SORP requires only a Tier 3 charity to prepare a statement of cash flows. The previous SORP’s own threshold was the Tier 1 ceiling, so a Tier 1 charity never had to prepare one. A charity below Tier 3 that is not a small entity under FRS 102 may still have to prepare one under that standard.

For the smallest tier, the best-known relaxation is the choice of presentation basis in the statement of financial activities, carried over from the previous SORP. Choosing natural classification switches off the cost allocation module. Determine your SORP tier lists the five modules and sets out the tier boundaries.

One disclosure question used to look contested: whether an explicit statement of impact is required at the smallest tier. The SORP requires it from Tier 2; at Tier 1 it says trustees should consider the difference the work made. The detail is in what the Charities SORP is and which tier you are in.

Establish which tier you are in and what your report must contain (reporting hub) sets out each tier’s full content list.

Can a charity adopt the new SORP early?

So far, early adoption is confirmed as available only in Scotland. The SORP allows early adoption in principle. But the SORP rules out early adoption in any jurisdiction where regulations name the SORP that applies, until those regulations are changed to allow it. Scotland has done this: its own 2025 regulations name the new SORP directly.

For England and Wales, and for Northern Ireland, no equivalent confirmation has been found. Do not assume early adoption is available in either nation on the strength of Scotland’s position. Check the current guidance before relying on it. This is the kind of gap that closes without warning.

Merging during the transition year

For a charity merging, or receiving a merger, during this period, the edition of the SORP’s merger module does not change the accounting answer. The Commission’s own guidance on accounting for a merger points to two different editions of that module, depending on when your accounting period starts.

For a UK charity, the merger criteria and disclosures are unchanged in substance. The new SORP’s own account of its changes lists only a clarification for Republic of Ireland company law and minor drafting amendments. Paragraph and table numbers have moved.

The real risk for a merging charity is the same one this whole page exists to manage. The rest of the accounts, leases and income recognition especially, can sit under a different SORP edition from the merger note. That happens if the merger falls either side of your own transition date.

The merger itself is covered in carry out merger due diligence and execute the merger and register it. There is no dedicated step for merger accounting. Treat the collision question above as the risk that matters, not the choice of Module 27 edition.

With the four workstreams mapped, the next year’s cycle starts again when you determine which accounts to prepare, now under the new SORP.

Common mistake: assuming the new SORP and the new thresholds arrive together

They were announced on the same day, by the same department, and are discussed in the same breath everywhere. So it is natural to assume one date covers both.

They use opposite bases. One attaches to the start of the reporting period, the other to the end of the financial year. That is why there is a window of year ends that get the new thresholds while still preparing under the old SORP.

Common mistake: restating comparatives for leases

The general transition rule is that comparatives are restated wherever practicable. So it feels safe to apply that across the board. Leases are an express exception.

You do not restate comparative information for them, and the cumulative effect goes to opening reserves instead. Income recognition gives a real choice between the same cumulative-effect approach and full restatement. Mixing up the two modules gives a materially different set of comparatives.

Common mistake: relying on the published threshold table in the SORP’s own appendix

It is in the SORP itself, it is a primary source, and it is a single convenient table. So it looks like the obvious thing to cite.

That appendix was published months before the England and Wales instrument was made, and it states the pre-change figures. It is already out of date for England and Wales.

For Scotland, its accruals figure still matches, but its audit and group-accounts figures predate Scotland’s own change. Only the Northern Ireland figures still stand. That makes the error easy to miss if you only check one nation.

Worked example

A charity works out three answers separately for the year in question, rather than assuming one date settles all of them. It checks whether the new SORP applies and whether the new statutory thresholds apply. If the charity is Scottish, it also checks whether the Scottish thresholds apply.

The three can differ for the same year. Each is tested on its own basis, not by reference to the others.