Article

Annual financial reporting: Charitable company illustrative accounts

By:

Harriet Taylor-Raine

23 May 20252 min read

As charities become more complex, reporting requirements can be hard to interpret and apply to different sectors. Harriet Taylor-Raine introduces our first-ever set of illustrative financial statements for a large charitable company to help guide you through the challenges.

Contents

These illustrative financial statements are in line with FRS 102 (January 2022), the Charities SORP (2019) and the Companies Act 2006. They're based on a fictitious, large charitable company called Little Pickles, the parent charity of a trading subsidiary (which operates charity shops) and 75% owner of a charitable subsidiary. The parent also holds 50% of a joint venture.

The disclosures in this set of illustrative accounts are appropriate for a large charitable company. Note, however, that other charities may refer to these financial statements. For charities registered only under Charities Act 2011, only the disclosures made in reference to FRS 102 and the SORP apply. Smaller charities may benefit from some disclosure exemptions and reduced reporting under the SORP. As preparers of charity accounts, you should be mindful of your legal and regulatory reporting requirements and seek advice where needed.

We’ve also made choices on the activities, transactions, and balances to include, as well as the accounting and presentation policies to apply, taking into account the flexibility provided by the requirements.

On 27 March 2024, the FRC issued amendments to FRS 102, following the second triennial review of the standard. The amendments mainly apply to financial periods starting on or after 1 January 2026, although early adoption is allowed. These example financial statements do not ‘early adopt’ the amendments.

While every care has been taken in preparing the illustrative accounts, you're advised to use these financial statements as a guide, in conjunction with:

the actual text of the standard
SORP and implementation guidance issued
relevant legislation
your professional advisers.

It's important to take all these into account before concluding on accounting treatments and disclosures based on your own transactions and circumstances.