This is aimed at preparers of a charity’s reports and accounts, the trustees (who are ultimately responsible for them and therefore need to understand the potential impact of COVID-19 in this context) and others who rely on, or have a particular interest in, charity reporting and accounts. This guide is intended to be applicable for charity reporting and accounts taking into account of the COVID-19 pandemic as an event after the reporting period and as an event during the reporting period.
This guide complements wider ICAEW guidance to highlight sector-specific considerations. A link to general guidance regarding the implications of COVID-19 on financial reporting can be found below:
This guide is not exhaustive and does not constitute advice. Each charity will need to consider its own circumstances. Charities should note that the accounting treatment adopted in management accounts for internal reporting purposes may differ from financial reporting requirements.
It is recommended that discussions are held with independent examiners and auditors at an early stage so that the key considerations for the trustees’ annual report and accounts can be addressed at the earliest opportunity. It has been the experience of charities that the preparation of charity reporting and accounts takes longer, particularly in a remote working environment, including the gathering of data, future financial forecasts, consideration of additional required disclosures and providing independent examiners and auditors with sufficient and appropriate supporting evidence; forward planning is vital.
This guide was published on 18 December 2020. The COVID-19 situation is fast-moving, and readers should consider whether any later developments will be relevant.
The Charities SORP (FRS 102), issued by the SORP-making body and recognised by the Financial Reporting Council (‘FRC’), provides guidance for charities on how to apply The Financial Reporting Standard applicable in the UK and Republic of Ireland (‘FRS 102’).
Related resources
Further information is available in theICAEW Coronavirus (COVID-19) hub.
The SORP-making body has published example Trustees’ Annual Report and Accounts on the Charities SORP microsite. Versions of the examples to consider the impact of the COVID-19 pandemic are in preparation.