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TECHNICAL ADVISORY SERVICES HELPSHEET

Does a charity need a cash flow statement?

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Published: 10 Jul 2018 Reviewed: 21 Aug 2019 Update History

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Technical helpsheet to help members understand when a charity requires a Statement of Cash Flows (often referred to as a cash flow or a cash flow statement).

Introduction

This helpsheet has been issued by ICAEW’s Technical Advisory Service to help ICAEW members to understand when a charity requires a Statement of Cash Flows (often referred to as a cash flow or a cash flow statement).

Members may also wish to refer to the following related helpsheets:

Requirements

Both company and non-company charities preparing accruals accounts have to comply with The Charities SORP (FRS 102) and practically are excluded from applying FRS 102 Section 1A. 

Update Bulletin One amended the SORP (FRS 102) to require larger charities to provide a statement of cash flows. It defines a larger charity as one with gross income exceeding £500,000 and so any charity breaching this threshold will require a statement of cash flows.

A smaller charity is not specifically required to prepare a statement of cash flows, however may still opt to do so.

It should be noted that the threshold for a larger charity is different from the relevant audit thresholds. Please refer to the Charities – financial reporting and scrutiny (England and Wales), Charities - financial reporting and scrutiny (Northern Ireland) and Charities - financial reporting and scrutiny (Scotland) helpsheets for further discussion on audit requirements for charities.

Reduced disclosure framework

Where the charity is a parent entity and produces consolidated accounts, it is likely to be a qualifying entity as defined in the glossary of FRS 102. Where this is the case, the parent charity may choose to take advantage of the reduced disclosure exemption in paragraph 1.12(b) of FRS 102, meaning it does not need to produce an individual cash flow statement.

This exemption would also be available where the charity is itself a subsidiary and still meets the definition of a qualifying entity.

If in doubt seek advice

ICAEW members, affiliates, ICAEW students and staff in eligible firms with member firm access can discuss their specific situation with the Technical Advisory Service on +44 (0)1908 248 250 or via webchat.

Terms and conditions

© ICAEW 2024  All rights reserved.

ICAEW cannot accept responsibility for any person acting or refraining to act as a result of any material contained in this helpsheet. This helpsheet is designed to alert members to an important issue of general application. It is not intended to be a definitive statement covering all aspects but is a brief comment on a specific point.

ICAEW members have permission to use and reproduce this helpsheet on the following conditions:

  • This permission is strictly limited to ICAEW members only who are using the helpsheet for guidance only.
  • The helpsheet is to be reproduced for personal, non-commercial use only and is not for re-distribution.

For further details members are invited to telephone the Technical Advisory Service T +44 (0)1908 248250. The Technical Advisory Service comprises the technical enquiries, ethics advice, anti-money laundering and fraud helplines. For further details visit icaew.com/tas.
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  • Update History
    01 Jul 2018 (12: 00 AM BST)
    First published
    01 Aug 2019 (12: 00 AM BST)
    Changelog created. Converted to new template. Links updated. Helpsheet has not had a full review