The Charities SORP Committee has issued advice on the financial reporting implications that may arise from the measures being put in place to contain the impact of COVID-19. The advice does not amend the SORP, is advisory in nature and aims to assist the preparers, auditors and examiners of accounts. It is relevant to academy trusts as charitable companies as well as colleges as exempt charities.
The advice states that trustees will need to consider the impact on the financial statements as a result of the changing activities of the charity itself. Trustees will also be aware that it will be important to provide users of the accounts with information about the material decisions they have had to take on judgements and uncertainties.
The following list is based on the advice and covers areas trustees/governors may wish to consider when preparing their report.
In reporting the main achievements of the charity explaining how the virus control measures affected their activities
Taking the opportunity to explain any financial uncertainties regarding the charity’s financial sustainability and consideration of going concern and the steps being taken to address these uncertainties
How the outbreak of the virus has affected staff, volunteers and beneficiaries (such as the charity’s pupils) and the implications for the charity’s operations and activities for the coming year
How the financial and operational effects of the virus and the control measures relating to the virus affected the principal risks and uncertainties facing the charity during the reporting period
Give consideration whether there are any implications for any existing or potential defined benefit pension liability and investments the charity holds
Consider any impact on the charity’s reserves policy, level of reserves and any change to funds set aside for future commitments
Consider the likely impact of the virus control measures and potential duration of the control measures on the future aims and activities of the charity
The impact of the virus-related control measures on any wider network of which the charity is a part and how this affects the charity’s operations
If you have any questions on this matter, please contact us.