Pandle’s Post

Can a non profit company use the Charity SORP? I have been asked to advise a non-profit company that wishes to prepare its accounts to comply with the Statement of Recommended Practice on Accounting and Reporting by Charities (SORP). They believe that they operate as a charity albeit that they are not registered as a charity. They have been told by their auditors that they cannot do this and also that the Companies Act 2006 (the Act) requires them to prepare a profit and loss account. I have often seen cases where auditors do not recognise the difference between for profit and non profit companies and the default option often leads to this confusion. FRS 100 ‘Application of Financial Reporting Requirements’ sets out the financial reporting requirements for UK and ROI entities. Paragraph 8 tates: “Entities whose financial statements do not fall within the scope of a SORP may, if the SORP is otherwise relevant to them, nevertheless choose to comply with the SORP’s recommendations when preparing financial statements, provided that the SORP does not conflict with the requirements of the framework adopted. Where this is the case, entities are encouraged to disclose that fact.” For example, Amnesty International Limited’s accounting policy states “The Directors have voluntarily adopted the substantive requirements of this SORP as if the Company were a charity as they consider that this is the- most appropriate format to give a true and fair view of the Company's and Group's activities.” Recognising that it is anomalous for Non Profit Companies to prepare a Profit and Loss Account Section 148 of the Act states: “The directors of every company shall at some date not later than eighteen months after the incorporation of the company and subsequently once at least in every calendar year lay before the company in general meeting a profit and loss account or, in the case of a company not trading for profit, an income and expenditure account for the period” Section 149 clarifies that any reference to a profit and loss account in the Act shall be taken, in the case of a company not trading for profit, as referring to its income and expenditure account. So in fact a non profit company should be preparing an income and expenditure account rather than a Profit and Loss Account. The SORP requires the presentation of a Statement of Financial Activities (SoFA) and states that the income and expenditure account can be included either within the SoFA, or as a separate summary income and expenditure account in addition to the SoFA. The Companies Act also includes provisions that allow standard formats to be adapted. CFG : Charity Finance Group ICAEW ACCA Crowe UK ACEVO NCVO LinkedIn for Nonprofits Directory of Social Change Third Sector Civil Society Media Ltd Charities Aid Foundation (CAF) Charity Commission for Northern Ireland Charity Commission for England and Wales Charity Law Association Bond UK

🌟 We’ve Built Giving into Our Business with B1G1 At EOG Accounting, giving back is at the heart of what we do. From donating to charities to offering free business information and tax advice, we believe in sharing our success because it makes a difference. Why Giving Matters to Us. Helping others reinforces our values and helps raise awareness of the importance of generosity. As B1G1 founder Masami Sato beautifully said, “What if we could make something great happen in our world just by doing the things we do every day?” This question has led to an inspiring story! Who Are @buy1give1 B1G1 was founded by small-business owners with a vision: making a difference through everyday business activities. Today, B1G1 unites over 3,000 businesses worldwide, embedding giving into daily operations to create unique giving stories. Every transaction can help improve lives, even with just a pound. How can you get Involved with B1G1 Your pledge can make all the difference! Join us in supporting incredible causes and making a real impact. The link is in the bio/comments below so you too can make a difference. 📣 Who We Support at EOG Accounting. 🧸 The Buddy Bag Foundation For every new customer we onboard, we donate a Buddy Bag to a child in need through the UK-based charity @buddybagofficial, offering comfort and essentials to children entering emergency care. Every year in the UK, over 48,000 children seek refuge in emergency accommodation, often with nothing more than the clothes on their backs. A Buddy Bag contains essential toiletries, pyjamas, underwear, a book, and a teddy bear. It’s something a child can call their own, no matter where they go. Join us in spreading hope by heading to the link in the bio/comments to get involved. 🌳 The Mango Tree Orphan Support Trust. Every tax return or VAT submission we complete helps us plant a tree in Kenya, aiding environmental restoration and supporting local communities to become self-sufficient through selling the fruit the trees bear. Choosing EOG Accounting as your accountant means you’re part of this journey, making a positive impact with every step. Together, we can create a world full of giving.❤️

Bitesize Small Charity Finance A budget will tell how much income and expenditure you can expect to receive in a given period. A cashflow forecast will tell you when that income and expenditure will hit your bank account. We need both. Not sure how to do cashflow forecasting? Check out our blog https://lnkd.in/eE49az-w

Bitesize Small Charity Finance Profit is vanity, cash is sanity as they say When the numbers go the wrong way, get a cashflow forecast. It will help you determine where the iceberg is and buy you valuable time to sail around it. Guidance on cashflow forecasting https://lnkd.in/eE49az-w Cashflow forecast template from the fab team at CA Plus https://lnkd.in/eywAj4Y8

🔍 Navigating the world of non-profit bookkeeping? Discover key considerations to keep your organization's finances transparent and compliant! 📊✨ . . . #NonProfitFinance #BookkeepingTips #TransparencyMatters #StartupFino

Boost your charity’s efficiency with our financial controls audit! Effective financial management is key to a healthy charity. Discover how our audits can help you streamline operations and ensure compliance. ✅ 👉 Find out more in our latest blog! https://lnkd.in/eeWA4AFW #CharityGovernance #FinancialAudit #ThirdSectorFinance #CharityLeadership

Boost your charity’s efficiency with our financial controls audit! Effective financial management is key to a healthy charity. Discover how our audits can help you streamline operations and ensure compliance. ✅ 👉 Find out more in our latest blog! https://lnkd.in/eeWA4AFW #CharityGovernance #FinancialAudit #ThirdSectorFinance #CharityLeadership

Happy New Year! If one of your tasks for the year is to rethink your office needs, my article discusses some VAT issues to consider, especially if you are a charity or other occupier that cannot recover most of the VAT you incur. #vat #office

📢 Charity Fund Accounting Made Easier Charity finance professionals know how tricky fund accounting can be – juggling restricted vs unrestricted funds, tracking activities, and staying SORP-compliant. But what if there was a way to simplify the process? Our latest article explains how a multi-dimensional chart of accounts can help charities: Streamline financial management Improve SORP compliance Save time and reduce errors Find out how this approach can make a real difference to your charity’s accounting processes. 👉 Read the full article: https://bit.ly/4gKXlp3

This inquiry focuses on charities that have failed to submit necessary accounting information twice or more within a five-year span. For daily news and analysis subscribe to the https://lnkd.in/gNfm9wi3 newsletter. #Accounting #Finance #Business