Charities SORP 2026: Key changes and what they mean for you

The Charities SORP 2026 introduces updates to financial reporting for the sector, most significantly affecting how charities recognise income. There are also changes to the Trustees’ Annual report.

Our latest guide, Charities SORP 2026 – Key changes, simplifies the detail to highlight what matters most and how you can prepare with confidence.

The new SORP applies to accounting periods starting on or after 1 January 2026 and reflects wider changes to FRS 102. It introduces several important developments, including:

• a new three-tier reporting structure based on gross income, with increasing disclosure requirements for larger charities
• revised income recognition rules, including a clearer distinction between exchange and non-exchange transactions
• a five-step revenue model, aligning charities more closely with commercial accounting practices 
• major changes to lease accounting, bringing most leases onto the balance sheet  
• enhanced Trustees’ Annual Report requirements, including mandatory impact reporting  
• updated thresholds and disclosures, including changes to cash flow reporting and sustainability expectations.

These changes will require careful judgement, updated processes and, in some cases, system and data adjustments.

Preparing for SORP 2026 is not just a technical exercise, it’s an opportunity to strengthen your financial reporting and storytelling.

Key steps 

• Assessing which tier your charity falls into and the resulting reporting requirements.
• Reviewing income streams and contracts to determine the correct accounting treatment.
• Evaluating the impact of lease changes on your balance sheet and covenants.
• Preparing for enhanced narrative and impact reporting.
• Understanding the transitional requirements and comparative disclosures.

Our guide brings these steps together in a practical, accessible way to help you get ahead.