ICAS publishes revised guidance for members acting for Scottish charities

By Christine Scott and Keith Purnell

11 August 2016

The ICAS Charities Committee has published the latest version of its popular guidance for ICAS members acting for Scottish charities.

Christine Scott, Assistant Director, Charities and Pensions and Keith Purnell, Policy Adviser, Charities at ICAS, explore the changes which have prompted this latest publication.

Scottish charities and their accountancy advisers are dealing with significant changes to UK accounting standards and to sector guidance, in the form of two new Charities Statements of Recommended Practice (SORPs). At the same time there are changes to the Office of the Scottish Charity Regulator’s (OSCR’s) monitoring regime to get to grips with.

New UK GAAP and the new Charities SORPs

From 1 January 2015, the Financial Reporting Council (FRC) replaced UK Generally Accepted Accounting Practice (UK GAAP) with a new suite of Financial Reporting Standards (FRSs).  The principal new standard is Financial Reporting Standard 102: The Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102).

The Financial Reporting Standard for Smaller Entities (the FRSSE), which is based on old UK GAAP, remains in place for accounting periods commencing on or after 1 January 2015 but has been withdrawn for periods commencing on or after 1 January 2016.

As a consequence, two new Charities SORPs apply to accounting periods commencing on or after 1 January 2015 and before 1 January 2016:  the Charities SORP (FRS 102); and the Charities SORP (FRSSE). It is a legal requirement for Scottish charities preparing “true and fair” accounts to comply with an appropriate Charities SORP.

Changes to OSCR’s monitoring regime

On the 1 April 2016, following engagement with the Scottish charity sector and other stakeholders, OSCR introduced a revised monitoring regime, encompassing the following changes:

  • A new Targeted Regulation framework designed to ensure that OSCR’s proactive and reactive activities prioritise; the protection of beneficiaries and charitable assets; and the integrity of charitable status.
  • A new annual return form with new questions reflecting the more targeted approach to regulation established by the new framework.
  • A new notifiable events reporting arrangement for charity trustees to report details of any events at their own charity which have a significant impact on the charity or its assets and beneficiaries.  There is no legal requirement to report a notifiable event but failure to do so may trigger a regulatory response from OSCR for non-compliance with trustees’ legal duties.

In addition, OSCR is now publishing, on its website, the annual reports and accounts of charities with income in excess of £25,000 and of all Scottish Charitable Incorporated Organisations (SCIOs), alternatively a charity can provide OSCR with a link to its report and accounts on its own website.

Read more: Guidance for ICAS members acting for Scottish charities


  • Guidance
  • Accountancy

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