SORPs in issue or proposed
Statements of Recommended Practice (SORPs) are recommendations on accounting practices for specialised industries or sectors. They supplement accounting standards and other legal and regulatory requirements in the light of the special factors prevailing or transactions undertaken in a particular industry or sector. SORPs are issued by industry or sectoral bodies and not by the FRC but are recognised for the purpose by the FRC.
To secure such recognition, SORP-making bodies are expected to meet criteria laid down by the FRC and to develop their SORP proposals in conformity with the FRC's code of practice, given in the Statement 'SORPs: Policy and Code of Practice'
A SORP is required to carry a statement by the FRC confirming, as appropriate, that the SORP does not appear to contain any fundamental points of principle that are unacceptable in the context of current accounting practice or to conflict with an accounting standard or the FRC's plans for future standards. To assist in dealing with proposals for SORPs the FRC seeks advice from the Accounting Council which has two specialist advisory committees: the Financial Sector and Other Special Industries Committee (FSOSIC) and the Committee on Accounting for Public-benefit Entities (CAPE).
Review of Public Benefit Entity SORPs
There are currently three public benefit entity SORPs covering charities, housing associations and further and higher education. As part of its work, CAPE asked for a review of these SORPs to highlight any inconsistencies between them. PricewaterhouseCoopers carried out the review
SORPs Fact Sheet
Further background information on SORPs is available from the fact sheet
that is available for download on this web-page. This lists existing SORPs for which the ASB has given its statement. It also lists the proposed SORPs that have been published as exposure drafts for public comment.
This document reviewed four PBE SORPs. Local authorities no longer use a SORP but rather a Code of Practice based on International Financial Reporting Standards.