The wait is finally over – the Charities SORP 2026 was released on 31 October and will be effective from 1 January 2026.

From initial review, it appears that the new SORP closely resembles the pre-consultation draft.  

The three size ‘tiers’ are confirmed and the thresholds (income less than £0.5m, between £0.5m and £15m and above £15m) are unchanged from the exposure draft.  

Trustees' report requirements There have been no substantial changes from the exposure draft on the trustees’ report requirements although more detail has been added on sustainability and an explanation of delegated authority is now required at Tier 2 rather than Tier 3.  

Income recognition and operating leases As expected, changes to the proposed requirements for income recognition and the treatment of operating leases as right of use assets are relatively minor. There is more detail on identifying grant and contract income and a specific reference to the use of a portfolio approach where charities receive large numbers of legacies. Regarding leases, a specific section discussing rolling leases has been added but there is no additional guidance on the assessment of the value of ‘social donation’ leases where a charity receives a discounted lease.  

Now is the time to start preparing for the implementation phase. Starting early is essential, and our team is here to help you with professional advice tailored to your unique circumstances. 

Next steps:

• Watch our on-demand webinar from earlier in the year to understand the changes to lease accounting, income recognition and trustees’ reports and discover how you can start preparing.

• Please get in touch with any questions.