The Further and Higher Education SORP brings significant changes to education providers and institutions. Watch our on-demand webinar to understand the changes to lease accounting and income recognition and discover how your organisation can begin preparing for implementation.

The implementation date for SORP 2026 is for accounting periods beginning on or after 1 January 2026, so this will affect year ends from 31 July 2027 onwards (including the comparatives for the 2025/26 financial year).

Our on-demand webinar explores the key areas that education providers and institutions should be focusing on now. The most significant changes for many organisations include:

• Income recognition – SORP 2026 introduces the five-step model for contract income recognition to match the timing of income recognition with progress on delivery of the contract. This will require a review of income streams to determine whether income is being recognised at the appropriate time. There are also some presentational changes, with the most significant being around how bursary payments are reported (i.e. netted against the income they relate to).

• Lease accounting – SORP 2026 requires recognition of the assets leased on the balance sheet as a ‘right of use asset’ with a corresponding liability reflecting the discounted value of the future payments. For institutions with leased property and/or vehicles, this is a significant change and will require significant work to prepare for implementation.

• Implementation timeline – Institutions need to start thinking about the impact on their financial statements for period beginning 1 August 2025 as the comparative year. Collating a comprehensive list of all leases within the organisation and its core terms (e.g., length, payment profile, break clauses etc.), alongside an assessment of all income streams against the new five step recognition principles is highly encouraged. Institutions should begin to document these comprehensively to arrive at conclusions around the proposed accounting treatment for each lease and type of income within the institution, which would be a starting point for the accounts preparation and audit.

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