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From the Professional Accounting Team In October 2025, the eagerly awaited 2026 version of the Charity Statement of Recommended Practice (2026 SORP) was published. This update follows the publication of the September 2024 version of FRS 102 and a SORP consultation in mid-2025, which attracted over 100 responses. The 2026 SORP contains some significant changes to how charities will report on their activities compared to the requirements of the 2019 SORP. This article looks at some of the key changes that charities who apply the SORP will need to be aware of as they begin their journey of reporting under the new SORP. Why was the SORP updated? As the SORP provides guidance on how charities can apply FRS 102, the SORP-making body must always ensure that it remains consistent with FRS 102. As a result, an amendment made to FRS 102 will prompt the need for similar amendments to be made to the SORP. Following the publication of the September 2024 edition of FRS 102, the SORP making body has set about updating the SORP to incorporate the various changes contained in the new edition of FRS 102. The Charity SORP 2026 represents the most significant overhaul of financial reporting for charities in Ireland and the UK for many years (and certainly the most significant change since the introduction of FRS 102). It will reshape how charities explain their activities, report on their impacts, recognise income, and account for leases. Changes made to the Charity SORP 2026 A New Tiered Reporting Structure The previous edition of the Charity SORP included the concept of a “larger charity” (charities with gross income exceeding £/€500,000). For those charities classed as “larger”, there were additional mandatory disclosure requirements compared to their “smaller charity” counterparts, particularly in relation to the disclosures in their Trustees Annual Report. Charity SORP 2026 builds on this concept and introduces a three-tier system, designed to further scale disclosure requirements according to charity size. Depending on the tier in which they fall, charities will have increased or decreased reporting requirements across five specific modules. The new tiers are as follows: Tier 1: Gross income up to £/€500,000 Tier 2: Gross income more than £/€500,000 but less than £/€15 million Tier 3: Gross income of more than £/€15 million This new system will result in some charities requiring more details in their Trustee’s Annual Report. These requirements are intended to be proportionate to the size of the charity. A Refocused Trustee’s Annual Report One of the most visible differences between a set of financial statements which have prepared solely under FRS 102 compared to the Charity SORP is the presence of a Trustee’s Annual Report in the SORP. The Trustee’s Annual Report is a key component of a charity’s Annual Report and aims to provide a narrative account of what has happened in the charity during the year. In the 2026 SORP, The Module dealing with the Trustee’s Annual Report (Module 1) has been rewritten to improve clarity, narrative quality, and alignment with financial information. One of the key goals of the SORP-making body in doing this is to help charity trustees to understand the narrative reporting requirements placed on them and to encourage trustees to link the narrative information to the financial details in the accounts. The emphasis of the Trustee’s Annual Report is firmly on impact reporting — communicating not just what a charity does, but also the difference it makes. Some specific changes relating to the Trustee’s Annual Report contained in the updated SORP include. Prompt questions to encourage charities to explain the impact that they are making. Within Module 1, there are now some “prompt questions” which should help charities to tell their story in a meaningful way. The purpose of this is to ensure that the charity does not see the module as simply a compliance checklist but rather a means by which they can explain the difference they are making in a way that is unique to their specific charity. The questions focus on areas such as, objectives, activities undertaken, strategy, measurement of success and wider societal benefits. Sustainability Reporting. In recognition of the fact that stakeholders are increasingly interested in how charities are responding to environmental, social and governance issues, the 2026 SORP introduces some mandatory and encouraged disclosures which address how the charity is responding to, and managing, these issues. Only charities in tier 3 (i.e. gross income exceeding €/£15 million) are required to explain this, with charities in tiers 1 and 2 having the option to do so. Legacy income. Where a charity is in receipt of legacy income and this income has been recognised in the accounts prior to the resources being received, the impact of this must be disclosed. Disclosure of auditors and exemption from disclosing certain information. Under the 2026 SORP there is now a specific requirement to provide the name of the charity’s auditors, if applicable. Furthermore, where certain disclosure exemptions are availed of (such as omitting the names of the CEO, senior staff members etc) due to a risk to their personal safety, there is no longer a requirement to explain why such information has been omitted from the Trustee’s Annual Report. Where a charity is availing of this option, they should be aware of the relevant local legislative requirements and should consult their regulator where necessary prior to availing of this exemption. Reserves and Going Concern Modules 1 and 3 include some changes in relation to reserves and going concern. The 2026 SORP introduces further clarity regarding the treatment of reserves. First, there is now a specific definition of reserves included in the glossary. Consideration of reserves is also better incorporated into going concern assessments and where a charity has no (or negative) reserves, there is now a requirement to explain why it is still operating as a going concern. Furthermore, there is now a recommendation for charities to consider their reserves and going concern assessment when explaining their plans for the future. In order to align with the FRS 102 Periodic Review amendments, there are some amendments to going concern disclosures, including a requirement to disclose significant going concern judgements as well as confirmation that the charity has considered at least 12 months of information in making its going concern assessment. Some going concern disclosures which were a “should” disclosure under the 2019 SORP are now a “must” disclosure. Revenue Recognition In order to align the SORP with the updates to FRS 102, Module 5 (“Recognition of income including contract income and income from legacies and grants”) has been updated and restructured. The updated Module provides clarity on how to account for the various income streams from which charities benefit. Module 5 has been split into 2 sections. Section 1: Exchange transactions Section 2: Non-exchange transactions Most charities will be in receipt of income from either (or both) types of transactions, and it is important to identify these appropriately, as the resulting accounting treatment is fundamentally different for each income stream. Exchange transactions For exchange transactions, charities will be required to apply the five-step model of revenue recognition whereby the transactions will go through the new model which has been derived from IFRS 15 Revenue from Contracts with Customers. The SORP includes guidance at each step of the process to help charities in applying the requirements. The five-steps of revenue recognition are: Step 1- identify the presence of a contract with a third party Step 2- identify the performance obligations in the contract Step 3- determine the transaction price Step 4- allocate the transaction price to the performance obligations in the contract Step 5- recognise income when or as a charity satisfies a performance obligation Charities who receive income from exchange transactions will need to bring these sources of income on the 5-step “journey” to determine the appropriate accounting treatment. In many cases, this will be a very straightforward exercise, with a clear path through each step. In some cases, charities will require a deeper consideration of each step. This might include, for example; A charity considering how many performance obligations exist in a contract with a customer and whether the series of goods/services are distinct. Consider a charity providing residential care services to individuals. If the contract with the customer includes additional goods and services beyond residential care services (such as meals, classes, medical sessions etc) then charities will need to consider the number of performance obligations in the contract and how these should be treated under step 2 of the model. Where a charity determines that it has multiple performance obligations in a contract, it must then allocate the transaction price to the performance obligations in the contract. This might involve estimation techniques if there are no observable standalone prices for that performance obligation. A charity will need to consider whether it satisfies its performance obligations over time or at a point in time as this will impact on the timing of revenue recognition. Non-exchange transactions For non-exchange transactions, charities are not required to apply the five-step model and instead must recognise income based on when performance-related conditions are met. Under the SORP, Non-exchange transactions that don’t impose future performance-related conditions on the recipient are recognised in income when the resources are received or receivable Non-exchange transactions that impose future performance-related conditions on the recipient are recognised in income only when the performance-related conditions are satisfied When resources are received or receivable before the performance-related conditions are satisfied, a liability is recognised While it is written more generally for an FRS 102 audience, and not specifically for charities, the FRC’s Factsheet 10 – Revenue from Contracts with Customers is a useful source of further reading on revenue recognition and the five-step model. Leasing Another significant change in the Periodic Review of FRS 102, which now makes its way into the Charity SORP, is in relation to lease accounting, and specifically lessee accounting. The updated SORP removes the operating vs finance lease distinction for lessee accounting and instead requires that most leases (with some exemptions) will be required to be recognised as a right-of-use asset on the balance sheet, with a related liability also recognised for future lease payments. A new Module 10B has been added to the SORP to address this. While much of the theory in relation to the new lease accounting rules is addressed in FRS 102, the SORP provides guidance and commentary on what this might mean for charities and deals with some circumstances that might be more prevalent in charities. Some specific circumstances addressed in the SORP include: Peppercorn leases whereby a charity has leased an asset for nil or for a nominal amount Social donation leases where the lease payments are below market rent Rolling leases with no specified end date The appropriate interest rate that a charity should use to determine the present value of lease payments Special conditions imposed on a lease because the tenant is a charity The new module 10B includes a useful flow chart which should help users to navigate the rules and signpost readers to where they can find further information. Not all assets leased by charities will be required to be recognised as right-of use assets and there are two prominent exemptions which (if applicable to the charity) will allow the charity to expense the lease in the year it is incurred. The two exemptions are; Low value leases. While not providing monetary guidance on what constitutes a “low-value” lease, the SORP sets out some asset types which would not typically be expected to be “low-value”. Furthermore, the SORP also highlights some assets which might be expected to be classed as "low-value”. Short-term leases. Leases which have a term of 12 months or less at the commencement date may avail of the option to not recognise a right-of-use asset in relation to the lease and instead can expense the lease payments on a straight-line basis over the lease term. A lease containing a purchase option cannot be treated as a short-term lease. Charities applying the SORP who lease assets will need to familiarise themselves with the new requirements and how they might impact on their assets, liabilities and profitability. Some challenges which may be encountered include: Information gathering- can the charity locate all of its leases? Determining the lease term- is there a legally enforceable lease in place? Has the charity a lease in place which has simply “rolled forward”. Leases where the charity is not paying full market value- How should a charity account for the “donation” element of this? Systems for recording leases- Does the charity have a system in place which can capture and record the relevant information for lease accounting or is a new system required? How to present value the lease liability at the beginning of the lease term. The FRC’s Factsheet 11 – Lease accounting for lessees is a useful source of further reading on the new lease accounting rules in FRS 102. Statement of Cash Flows Under the previous version of the SORP, a charity was required to prepare a statement of cash flows when it had income in excess of £/€500,000. The 2026 SORP increases this threshold to £/€15 million (ie. a Tier 3 charity). This change means that only the very largest charities will be required by the SORP to prepare a cash flow statement, and this change is broadly consistent with the requirements placed on companies of a similar size under FRS 102. In making the change the SORP making body noted that the change will have a positive impact on charities as it will reduce the reporting requirements for smaller charities. However, it is important to note that the increased threshold does not override any existing requirement that a charity might have to prepare a statement of cash flows. So, for example, a charity who operates as a company may have income below £/€15 million but may still be required by company law to prepare a statement of cash flows because it does not meet the definition of a small entity. The exemption is also voluntary and a charity who is in tier 1 or 2 may choose not to avail of this and prepare a statement of cash flows. Get ready for implementation The 2026 Charity SORP is effective for reporting periods beginning on or after 1 January 2026, leaving charities with limited time to prepare. Charities who apply the SORP should act now to familiarise themselves with the new requirements, assess the impact on their reporting processes, and plan any updates needed for a smooth transition. By acting early, charities can ensure they are ready to implement the revised SORP and meet their reporting obligations.   This information is provided for information only and nothing in this article purports to provide professional advice or definitive legal/technical interpretation(s) or opinion(s) on the applicable legislation or legal or other matters referred to in the information. If the reader is in doubt on any matter in this complex area further advice must be obtained. While every reasonable care has been taken by the Institute in the preparation of the information we do not guarantee the accuracy or veracity of any resource, guidance, information or opinion, or the appropriateness, suitability or applicability of any practice or procedure contained therein. The Institute is not responsible for any errors or omissions or for the results obtained from the use of the resources or information contained herein.      

From the Professional Accountancy team…... Readers may find interesting the content of the CBI s first edition of CBI Financial Crime Bulletin following on from the previous AML Bulletin series. The bulletin was published in December 2025. It deals with areas such as risk assessments referencing Ireland’s AML National Risk Assessment which is currently being updated and hopefully will be published this year. It also deals with crypto, fraud and scams ,financial sanctions and EU AML developments with AMLA now up and running  .   This information is provided as resources and information only and nothing in these pages purports to provide professional advice or definitive legal interpretation(s) or opinion(s) on the applicable legislation or legal or other matters referred to in the pages. If the reader is in doubt on any matter in this complex area further legal or other advice must be obtained. While every reasonable care has been taken by the Institute in the preparation of these pages, we do not guarantee the accuracy or veracity of any resource, guidance, information or opinion, or the appropriateness, suitability or applicability of any practice or procedure contained therein. The Institute is not responsible for any errors or omissions or for the results obtained from the use of the resources or information contained in these pages.    

Welcome to the latest edition of Technical Roundup.   In developments since the last edition, the UK Government announced that it is not progressing with the Audit and Corporate Governance Reform Bill. The Department of Enterprise, Tourism and Employment (DETE) has launched a public consultation seeking views on proposed legislative measures through the Consumer Protection, Competition and Enforcement Bill 2026 to strengthen consumer protection and enforcement in Ireland with a closing date for receipt of submissions of Friday, 27 February 2026.  The European Data Protection Board (EDPB) and the European Data Protection Supervisor (EDPS) have adopted a Joint Opinion on the European Commission’s Proposal for the ‘Digital Omnibus on AI’.  Read more on these and other developments that may be of interest to members below.   Financial Reporting   The European Financial Reporting Advisory Group (EFRAG) is hosting a webinar “Circular Economy Reporting in Focus: The Draft Simplified ESRS E5” on 3 February 2026. This webinar will discuss the role of the E5 standard and the key lessons learned from the first year of its application.  Richard Moriarty, Chief Executive of the Financial Reporting Council (FRC), has set out the regulator's priorities and focus for 2026. Within this document are five key focus areas;  underpinning investor confidence in UK plc  reducing unnecessary burdens on business while maintaining high standards  developing deep insight into the markets we oversee so our regulation is based on evidence and expertise  identifying future trends and innovations to support the health of the markets we oversee  supporting the skills and resilience of the professions we regulate  The UK Department for Business and Trade (DBT) has introduced new regulations requiring large companies to include information on their supplier payment practices, policies and performance within their directors’ report for financial years beginning on or after 1 January 2026. Full guidance on who must report and what information is required is available on the DBT website.  Auditing and Assurance   Accountancy Europe (AE) published analysis and findings regarding audit exemption thresholds in Europe.  The UK Government announced that it is not progressing with the Audit and Corporate Governance Reform Bill. In a letter to the Chair, Business and Trade Committee, the Minister for Small Businesses and Economic Transformation Blair McDougall stated that the government’s key priority is to promote growth and reduce administrative burdens, and that it would not be right to prioritise the introduction of measures that would increase costs on businesses. Whilst the Institute is generally supportive of simplification and proportionate regulation, uncertainty is bad for business. It is not clear whether some of the reform proposals included in the now abandoned bill might be brought forward in another way. The future role of the FRC also remains unclear. We will continue to engage with the UK Government and the FRC as this continues to evolve.   Insolvency   The Institute is hosting three in-person sessions which will provide an introduction to the new Creditor Voluntary Liquidation workbook. The workbook has been produced to assist Liquidators in complying with legislative and SIP requirements when conducting statutory meetings, reporting to creditors and approval of remuneration.  The sessions will also cover compliance matters and will include potential issues and problems that can arise and how to avoid or best navigate these. It will also include some practical examples and a Q&A session.  The sessions are targeted at professionals taking on insolvency appointments and acting as Liquidator, and those training or working in the insolvency sector looking to gain expertise in this area.     Each of these three-hour sessions are free to attend and will take place on the following dates:  Tuesday, 3 March at 1pm  Cork Book Now    Wednesday, 4 March at 9am  Galway  Book now   Thursday, 5 March at 9am Dublin  Book now  Sustainability   The European Securities and Markets Authority (ESMA) has published a second thematic note on sustainability-related claims focusing on ESG strategies. This publication offers practical guidance for making sustainability claims ensuring clear, fair and not misleading sustainability-related claims are made by market participants and also addressing greenwashing risks in support of sustainable investments.   The European Central Bank (ECB) announced that it has advanced its climate and nature work based on the 2024-2025 plan embedding climate and nature-related risks into its core work.  Anti-money laundering, Authorised Corporate Service Provider registration  On 1 January 2026, the European Banking Authority (EBA) and the Authority for Anti-Money Laundering and Countering the Financing of Terrorism (AMLA) completed the transfer of all AML/CFT mandates and functions from the EBA to AMLA. The handover concludes the EBA's stand-alone AML/CFT mandate that began in 2020 and is part of the new EU AML/CFT package, which established AMLA at the centre of an integrated, European system of AML/CFT supervision.  Chartered Accountants Ireland responded to HM Treasury’s Consultation regarding Anti Money Laundering /Counter Terrorist-Financing (AML/CTF) Supervision Reform: Duties, Powers and Accountability. The consultation response provided feedback on proposals to reform the supervision of anti-money laundering and counter-terrorist financing (AML/CTF) compliance among professional services businesses following the UK government’s announcement in 2025 that the Financial Conduct Authority (FCA) should take over responsibility for AML/CTF supervision of legal, accountancy, and trust and company service providers.  Readers may know UK Companies House had planned that that by Spring 2026 identity verification of presenters would be a compulsory part of filing any document with Companies House and that all third-party agents filing on behalf of UK companies would need to be registered as an ACSP with Companies House. Since March 2025, Trust and Company Service Providers (TCSPs) and other professional service providers (such as accountants and solicitors) who are registered for Anti Money Laundering purposes with a supervisor in the UK, have been able to register with Companies House to become Authorised Corporate Service Providers (ACSPs). In an announcement earlier this week, Companies House confirmed the delayed implementation of this Spring deadline for presenters and third-party filling agents to be registered with Companies House to at least November 2026.  Central Bank of Ireland (CBI)  The CBI published the results of its thematic assessment of operational resilience in the MiFID investment firm sector, finding evidence of maturing frameworks but identifying weaknesses in firms’ identification and mapping of critical or important business services, scenario testing, and integration of firms' operational resilience frameworks with existing risk management frameworks.  Gerry Cross, Director, Capital Markets and Funds, Central Bank of Ireland delivered a speech at the Compliance Institute AGM. The speech focused on 'Supervising for success: some themes for a time of change'. The speech covered a number of important topics of relevance to compliance professionals and regulators including the important objective of securing customers’ interests, individual accountability, simplification, resilience, leveraging technology, and the Central Bank’s evolving approach to supervision.  The CBI and Banca d’Italia launched the first joint Innovation Data Challenge designed to foster cutting-edge research and innovation in the retail payments sector.  The new Consumer Protection Code (CPC 2025) and related Standards for Business will come into effect on 24 March 2026. Alongside the publication of the Consumer Code 2025, the CBI has recently published General Guidance on the Consumer Protection Code to support firms in implementing the requirements.  Artificial Intelligence (AI)  The European Data Protection Board (EDPB) and the European Data Protection Supervisor (EDPS) adopted a Joint Opinion on the European Commission’s Proposal for the ‘Digital Omnibus on AI’. The EDPB and EDPS support streamlining the European AI Act implementation but call for stronger safeguards to protect fundamental rights.  Cybersecurity   The European Commission plans to revise the 2019 Cybersecurity Act to strengthen the EU’s resilience and capabilities in the face of these growing threats.  The purpose is to strengthen the security of the EU’s information and communication technologies by reducing the risks from third-country suppliers and to ensure that digital products and services used are tested for security in a more efficient way.  The UK Government has published its new 'Government Cyber Action Plan (GCAP)', which aims to strengthen resilience across the UK particularly in the public sector. The GCAP outlines roles and relationships between organisations working with the public sector (including the UK's National Cyber Security Centre (NCSC) and the Department for Science, Innovation and Technology), setting clear milestones, strengthening governance, and providing centralised support that allows departments to focus on securing what matters most. The NCSC has published a summary of the new GCAP document on its website.  The UK's NCSC published new guidance setting out secure connectivity principles for Operational Technology (OT). These principles will help organisations design, review, and secure the connectivity within and to OT systems, transforming system understanding into positive cyber security action.  The UK's NCSC has also issued a warning over hacktivist groups disrupting UK organisations and online services. Organisations, particularly local government authorities and operators of critical national infrastructure, are being encouraged to review their defences and improve their cyber resilience by preparing and being able to respond to denial of service (DoS) attacks.   Digital Operational Resilience Act (DORA)  The European Supervisory Authorities and UK financial regulators signed a Memorandum of Understanding on oversight of critical ICT third-party service providers under DORA. The underlying details of the principles and key areas for cooperation and exchange of information between the ESAs and the UK Financial Authorities are included in the Memorandum of Understanding on DORA oversight of critical ICT third-party service providers in EU and UK.  Other News  Enterprise Ireland has created a new guide to support Irish SMEs on their sustainable export journey into the EU. It offers guidance on Navigating ESG Procurement - EU Export Guide for Germany, France, Spain and Italy to ensure continued competitiveness when competing for export opportunities to main EU markets including Germany, France, Spain and Italy.   The Government published its Legislation Programme for Spring 2026 setting out the Government’s priorities for the coming ten-week parliamentary session. It includes various areas of planned legislative changes including reference to heads in preparation of legislation for the transposition of the EU’s 6th Anti-Money laundering package that requires primary legislation. Work is ongoing on the National Cyber Security Bill (incorporating provisions to establish the National Cyber Security Centre on a statutory basis and provide for related matters), and heads are in preparation on the Regulation of Artificial Intelligence Bill giving full effect in Ireland to the EU Regulation on Artificial Intelligence, including the establishment of the national AI central office.  The UK's Information Commissioner's Office (ICO) published updated guidance on international transfers of personal information. This guidance supports businesses with understanding and complying with the transfer rules under UK GDPR.   The European Securities and Markets Authority (ESMA) published principles on risk-based supervision, which is a critical pillar for ESMA’s simplification and burden reduction efforts. These principles support a common and effective EU-wide supervisory culture to strengthen the EU single market.  The European Central Bank (ECB) published its latest economic bulletin covering the external environments, economic activity, prices and costs, financial market developments, financing conditions, credit and fiscal developments.   The Department of Enterprise, Tourism and Employment (DETE) launched a public consultation seeking views on proposed legislative measures through the Consumer Protection, Competition and Enforcement Bill 2026 to strengthen consumer protection and enforcement in Ireland. The closing date for receipt of submissions is 5pm on Friday, 27 February 2026.   Minister of State for Small Businesses, Retail and Employment at DETE has signed into law a revised Code of Practice on Access to Part‑Time Working . Prepared by the Workplace Relations Commission (WRC), the updated Code provides practical guidance to help employers and employees agree part‑time arrangements that support flexible, inclusive and modern workplaces.   The European Data Protection Board (EDPB) contributed to the European Commission’s evaluation of the application of the Data Protection Law Enforcement Directive (LED). In addition, the EDPB has updated recommendations on the application for Processor Binding Corporate Rules (BCR-P) covering the transfer tool that can be used by a group of undertakings or enterprises to transfer personal data outside the European Economic Area to processors within the same group to ensure compliance with GDPR. The updated recommendations will be open to public consultation until 2 March 2026.   CLS Chartered Secretaries has recently published its CLS “Top 10 Co Sec Points for 2026”. They write that each year they highlight some Company Law and Company Secretarial points to consider and some useful ones for 2026 including changes made to the audit exemption rules in 2025 and options if a company is late in filing.  For further technical information and updates please visit the Technical Hub on the Institute website.           This information is provided as resources and information only and nothing in the information purports to provide professional advice or definitive legal interpretation(s) or opinion(s) on the applicable legislation or legal or other matters referred to in the information. If the reader is in doubt on any matter in this complex area further legal or other advice must be obtained. While every reasonable care has been taken by the Institute in the preparation of the information we do not guarantee the accuracy or veracity of any resource, guidance, information or opinion, or the appropriateness, suitability or applicability of any practice or procedure contained therein. The Institute is not responsible for any errors or omissions or for the results obtained from the use of the resources or information contained herein.