Under both the FRSSE SORP and the FRS102 SORP, larger charities (those subject to statutory audit) will need to give more detail in their Trustees' Annual Report. The rules refer to giving a 'balanced review' and in many instances encourages charities to talk about their failures as well as their successes. This blog will consider some of the more difficult or contentious new requirements.

Risk statement
Under the old rules, Trustees had to confirm in their report that they had considered the main risks faced by the charity, and had taken appropriate action to mitigate these. This requirement has been expanded such that charities must now give details about the risks.

The new SORPs require the report to include 'a description of the principal risks and uncertainties facing the charity and its subsidiary undertakings, as identified by the charity trustees, together with a summary of their plans and strategies for managing those risks'.

In a world where charities increasingly have to compete against other charities and commercial businesses for funding, Trustees will want to consider carefully what they include in their report to comply with this requirement.

Going Concern
Both SORPs encourage all charities (not just larger ones) to explain any uncertainties surrounding the charity's ability to continue as a going concern in the Trustees' Annual Report. This is another area which will require careful consideration of proposed wording by the Board.

Other matters
The Trustees' Report will also need to give additional details about a charity's policies and objectives in the following areas (if they are material), as well as how they fit in with the achievement of the charity's aims and objectives:

• Social investment
• Grant making
• Holding investments

Usually the wording for the Trustees' report is one of the last things we receive from clients, sometimes only a matter of ours before the accounts need to be sent out! We are advising clients to start work on the Trustees' report now, and to ensure that the Board have had plenty of time to consider it in advance of the proposed approval of accounts.

Next time, I'll give more details about the new requirements for disclosures about Key Management Personnel remuneration in both Trustees' report and the notes to the accounts.

Jenny Simpson is a partner at Wylie & Bisset LLP and sits on the UK Charity SORP Committee. The blog originally appeared on SCVO's website in February 2016 and has been reproduced with both Jenny & SCVO's permission.