Statements of Recommended Practice (SORPs) supplement accounting standards and other legal and regulatory requirements to reflect factors prevailing or transactions undertaken in a specialised industry or sector. SORPs are issued by the sectoral body recognised for the purpose by the ASB.

Insurance Business

The Association of British Insurers (ABI) has recently amended the requirements of its SORP relating to the measurement of liabilities for non-profit life assurance business to correspond to changes in the related FSA regulations.

Pension Scheme Accounts

In December, the Pensions Research Accounting Group (PRAG) issued an exposure draft of proposed revisions to the SORP on pension scheme accounts, updating the SORP for recent changes in pensions regulation and also incorporating some of the requirements of FRS 26 ‘Financial Instruments: Recognition and Measurement’. The exposure draft is open for comment until 21 March and the exposure draft is available from the PRAG website, www.prag.org.uk.

Local Authorities

An exposure draft for the 2007 Local Authority SORP was published on the CIPFA website in November with a three month comment period to 14 February 2007. The draft SORP includes proposals for applying the financial instruments standards (FRS 25, FRS 26 and FRS 29) to all local authorities. The draft SORP also puts forward proposals for accounting for soft loans, ie loans advanced at a below market rate of interest. In approving the exposure draft for publication, the ASB has made clear its view that soft loans should be written down to fair value on initial recognition.

Charities

With the next update of the Charities SORP expected for 2009, the new Charities SORP Committee is taking forward work that may result in an Information Sheet for SORP 2005 that will clarify interpretational issues such as accounting for grants, the allocation of bank interest and other finance costs; and the relevance of the business review. The Information Sheet is not intended to amend SORP 2005 and therefore does not require consultation or ASB endorsement.

Registered Social Landlords

Following consultation on an exposure draft for an update to the RSL SORP, the RSL SORP Working Party has decided to consider further the proposed accounting requirements for shared ownership sales. This is in response to concerns raised by providers of low cost home ownership schemes. The further work that is planned is expected to delay publication of the SORP update to autumn 2007.

Higher and Further Education

Following a review by the HEFE SORP Board, an exposure draft for an update to the HEFE SORP was published on Universities UK’s website in January with a three month comment period to 13 April 2007. The exposure draft aims to provide enhanced guidance in key areas such as income recognition and retirement benefits. It also brings the SORP up to date in terms of considering accounting standards that have been issued since the current SORP was published in July 2003.