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Charity accounts templates – non-company

Completion notes

Section 1: Introduction

The Charities SORP (FRS 102) applies to accounting periods beginning on or after 1 January 2015. In 2016,
Update Bulletin 1 amended this SORP and the changes made by this apply to accounting periods beginning
on or after 1 January 2016. The pro forma accounts incorporate these changes so by using them, you are
choosing to adopt Update Bulletin 1 early. These guidance notes reflect the requirements for reporting
periods beginning on or after 1 January 2016 following Update Bulletin 1.

Purpose of pro forma accounts

These pro forma accounts are designed to help small charities prepare and present accruals accounts. They
provide a format for such accounts and set out the key disclosures contained in the Charities SORP (FRS 102).
The pro forma accounts and notes to the accounts when fully completed will include all the information
necessary for smaller charities.

Charities that should not use the pro forma accounts

The pro forma accounts should not be used if the charity:
• a charitable company;
• is preparing its accounts using natural categories;
• has an income exceeding £500,000;
• is required to follow another SORP or an alternative regulatory framework (for example, registered
social landlords);
• has decided, when preparing the accounts, not to follow the FRS102 SORP (3.41, 3.42 FRS102 SORP);
• is an investment fund charity, which includes common deposit funds, common investment funds and
pooling scheme funds;
• has a material subsidiary undertaking, joint venture or associated trading undertakings;
• has permanent endowment and is using the total return approach to investing the endowment;
• is preparing group or linked accounts;.

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Section 1: Introduction (cont)

• is operating a defined benefit pension scheme unless it is accounted for as a defined contribution
scheme (eg. in the situation where a charity is unable to ascertain its share of the underlying assets
and liabilities);
• has financial assets and financial liabilities which do not meet the FRS 102 definition of basic
financial instruments.
Trustees of charities where these pro forma accounts are unsuitable should either:
• refer to the appropriate publications such as the Charities SORP (FRS 102) for more detailed guidance; or
• consider using an accountant familiar with the Charities SORP (FRS102) to help prepare the accounts.
Trustees of charities also registered in Scotland should check the website of the Office of the Scottish Charity
Regulator to identify if any additional information is required to comply with charity law in Scotland and
then amend this pro forma accordingly.

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Section 2: General guidance notes

This section provides guidance on:

• How the pro forma accounts can be used;
• How precise the accounts need to be;
• Rounding;
• Netting off;
• What activities and resources the accounts must include;
• What statements the accounts must include.

How can the pro forma be used?

These pro forma accounts are based on the general methods and principles of the Charities SORP (FRS 102).
The pro forma accounts have been designed to cover most circumstances that are likely to apply to smaller
charities. However, charity trustees must take care that they provide any additional information necessary
to give a true and fair view of their charity’s activities and financial position. If there are other matters
which are material and necessary to include a proper understanding of the accounts but are not specifically
provided for in the pro forma accounts, then further details should be given by additional notes.
Where a charity needs to account for a complex transaction or one that is unusual for smaller charities
then reference will need to be made to the Charities SORP or advice may be necessary from a
professional accountant.
The pro forma accounts when properly completed with information and amounts from the charity’s
accounting records, will meet the charity’s legal requirements for preparing annual accounts.
The charity trustees/directors must approve the accounts and at least one (but we recommend two) of
them should sign the balance sheet as evidence of approval.

How precise do the charity’s accounts need to be?

The word material is used often in the Charities FRS 102 SORP and in these notes. An item is material if
its inclusion or exclusion from the accounts would be likely to change a reader’s view about the accounts.
Normally the larger the item the more material it is likely to be.

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Section 2: General guidance notes (cont)

Reporting details of small value items is often not necessary as they do not affect a readers overall
understanding of the accounts. For example, amounts under £1 are never important and can be ignored.
Some items may or may not require reporting depending on the size of the charity (measured by gross
income or balance sheet totals). For example, it may be material to include in the balance sheet a tangible
fixed asset costing £500 if the charity has £10,000 gross income but it would be much less material if a
charity has £250,000 gross income.
Some items may always be material to charities, for example, amounts paid to trustees for expenses or
remuneration and amounts paid to related parties.
All information requested in the pro forma accounts should be given unless:
• It does not apply to the charity; or
• It is identified in the pro forma accounts as information that the trustees may choose to give.

Rounding
It is usual to prepare accounts in whole £s. Amounts are rounded to the nearest £ (eg £4.60 becomes £5).

No netting off
All the incoming resources for the year are included in the statement of financial activities gross. For
example, the gross takings from a fund raising event should be shown as incoming resources and expenses
associated with the event shown as resources expended.

Presentation currency
The presentation currency is the currency in which the accounts are denominated. A charity should
normally prepare its accounts in the currency of the jurisdiction of its administration unless it operates
predominantly by generating and spending its cash in a different currency. Where a charity operates
predominantly in a different currency, it should prepare its accounts in that currency.

What statements should the accounts include?

Charity accounts must include:
• A statement of financial activities (SoFA);
• An income and expenditure account;
• A balance sheet; and
• Notes to the accounts.
Registered charities preparing accruals accounts must also prepare a trustees’ annual report (“TAR”) which
provides background information about the charity and a written explanation of what the charity is trying to do
and how it goes about it. A pro forma trustees’ annual report is also available from the Charity Commission.

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Section 2: General guidance notes (cont)

The accounts will normally be accompanied by a report from either:
• an independent examiner (provided the charity is below the audit threshold); or
• a registered auditor (if the charity is over the audit threshold or chooses to have a full audit of its accounts).
Most charities for which these pro forma accounts were designed are only required by the law to have an
independent examination. For accounting periods ending on or after 1 April 2009, charities with a gross
income of £25,000 or less are not required by law to have an independent examination or audit. Some
charities will also have a requirement in their governing document, or imposed by a donor, to have an
independent examination or audit by a registered auditor.
A pro forma independent examiner’s report is available from the Charity Commission.

What activities and resources must the accounts include:

The accounts should include all funds that the charity trustees manage and control. This is to ensure that
someone reading the accounts gets a full understanding of the assets, liabilities and resource movement of
the charity.

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Section 3: Statement of financial activities (including income and expenditure account)

The SoFA records all the incoming resources and resources expended by the charity in the financial year.
The pro forma SoFA is divided into columns and rows which are numbered. A summary is provided of what
should be entered into each column and row.

Activity categories
The analysis of income and expenditure by activity is encouraged for all charities preparing accruals
accounts. However, charities not subject to statutory audit are not required to report their income and
expenditure on an activity basis and may choose to adopt an alternative approach, eg an analysis based on
the nature of the income and expenditure. Charities choosing to analyse income and expenditure using a
basis other than the activity basis should not use these pro forma accounts.
Where activity categories are used, costs which relate to more than one activity can be apportioned
between activities.

Columns – fund accounting

F01 to F05 describe what should be entered into each column
F01 This column is for all amounts relating to unrestricted funds.
F02 This column is for all amounts relating to restricted income funds.
F03 This column is only for movements on endowment funds.
F04 This column is the total of columns F01, F02 and F03.
F05 This column is the total funds entered in the accounts for the previous year.

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Section 3: Statement of financial activities (SoFA) (cont)

Rows – income
Rows S01 to S07 below explain what should be included in each category of income where the charity
trustees choose to follow the recommended “activity” categories of the FRS 102 SORP.

Row Analysis category Explanation

S01 Donations and legacies Income from donations and legacies comprises income
generated from the following sources:
• gifts and donations received/receivable including
legacies;
• any tax reclaimed on amounts received under gift
aid;
• grants that provide core funding or are of a general
nature;
• membership subscriptions and sponsorships where
these are, in substance, donations; and
• gifts in kind and donated services and facilities.
Income from donations and legacies is defined in the
Charities Statement of Recommended Practice (FRS 102
SORP) at paragraph 4.31 and 4.32.
S02 Charitable activities This includes:
• sale of goods or services as a charitable activity;
• sale of goods made or services provided by the
charity’s beneficiaries;
• letting of non-investment property in furtherance of
the charity’s objects;
• grants specifically for the provision of goods or
services as part of charitable activities or services to
beneficiaries (including performance-related grants);
and
• ancillary trades connected with the above.
Income from charitable activities is defined in the Charities
Statement of Recommended Practice (FRS 102 SORP) at
paragraphs 4.33 to 4.34.

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Section 3: Statement of financial activities (SoFA) (cont)

Row Analysis category Explanation

S03 Other trading activities This includes income from trading activities that specifically
raise funds for the charity; for example:
• fundraising events such as jumble sales, firework
displays and concerts;
• sponsorships and social lotteries which are not pure
donations;
• shop income from selling donated goods and
bought-in goods;
• providing goods and services other than for the
benefit of the charity’s beneficiaries; and
• letting and licensing property held mainly
for functional use but temporarily surplus to
requirements.
Income from other trading activities is defined in the
Charities Statement of Recommended Practice (FRS 102
SORP) at paragraphs 4.35 to 4.36.
S04 Investments Investment income includes income from investment
assets, including dividends, interest receivable and rent,
but excludes realised and unrealised investment gains and
losses (see S14, below).
Investment income is defined in the Charities Statement of
Recommended Practice (FRS 102 SORP) at paragraphs 4.37
to 4.38.
S05 Separate material item of This line should be used where a material item of income
income occurs which falls within the ordinary activities of the
charity but because of its size or incidence needs to be
disclosed separately.
S06 Other This amount includes gains on the disposal of tangible
fixed assets and receipt of any other income that cannot
be accounted for in the categories above (S01 to S05). It
may also include the conversion of endowment funds into
income.
Other income is defined in the Charities Statement of
Recommended Practice (FRS 102 SORP) at paragraphs 4.39
to 4.41.
S07 Total Total of rows S01 to S06.

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Section 3: Statement of financial activities (SoFA) (cont)

Rows – expenditure
Rows S08 to S011 below explain what should be included in each category of expenditure where the charity
trustees choose to follow the recommended “activity” categories of the FRS 102 SORP.

Row Analysis category Explanation

S08 Raising funds These costs are defined in the Charities Statement of
Recommended Practice (FRS 102 SORP) at paragraphs
4.44 to 4.45.
This amount includes expenditure on seeking donations
and legacies (for example donations, legacies, core
funding grants and gifts in kind). The costs may include
fundraising, advertising, marketing and direct mail
materials, as well as any payments to an agent.
They will normally include publicity costs but exclude
the cost of educational material produced to promote
the charity’s work, which is classed as a cost of
charitable activities.
S09 Charitable activities These comprise all the expenditure incurred in meeting
the charitable objectives including amounts spent on:
• grants,
• the direct provision of charitable service; and
• a proportion of the charity’s support costs
which, if allocated, will be explained in the
notes to the accounts.
They exclude:
• the cost of raising funds to finance these activities
These costs are defined in the Charities Statement of
Recommended Practice (FRS 102 SORP) at paragraphs
4.52 to 4.55.
S10 Separate material expense item This line should be used where a material item of
expense occurs which falls within the ordinary activities
of the charity but because of its size or incidence needs
to be disclosed separately.
S11 Other Other expenditure includes all expenditure that is neither
related to raising funds for the charity nor part of its
expenditure on charitable activities. Other expenditure
is defined in the Charities Statement of Recommended
Practice (FRS 102 SORP) at paragraph 4.56.
S12 Total Total of rows S08 to S11.

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Section 3: Statement of financial activities (SoFA) (cont)

Rows – remaining

Row Analysis category Explanation

S13 Net income/(expenditure) before This is the total in row S07 less the total in row S12.
investment gains/(losses)
S14 Net gains/(losses) on investments This is the total of any unrealised gains and losses
resulting from the revaluation of investment assets
to market value, and gains and losses realised on the
disposal of investment assets during the year.
Gains/(losses) on investment assets is defined in the
Charities Statement of Recommended Practice (FRS 102
SORP) at paragraph 4.59.
S15 Net income/(expenditure) This is the total in row S13 plus/(less) the total in row S14.
S16 Extraordinary items Extraordinary items are material items or transactions
that:
• fall outside of the charity’s ordinary activities;
• are abnormal in their nature; and
• are not expected to recur.
In the unlikely event of their occurrence, extraordinary
items must be disclosed on the face of the SoFA.
Extraordinary items are defined in the Charities
Statement of Recommended Practice (FRS 102 SORP) at
paragraph 4.17.
S17 Transfers between funds Any transfers between funds are analysed in these rows.
S18 Gains and losses on revaluation of These are the gains or losses on the revaluation of
fixed assets for the charity’s own property, plant and equipment used by the charity,
use and heritage and intangible assets. A reversal of a
previous valuation increase is included here but any
charge for impairment is included in the relevant
expenditure heading(s).
Gains/(losses) on revaluation of fixed assets is defined in
the Charities Statement of Recommended Practice (FRS
102 SORP) at paragraph 4.62.
S19 Other gains/(losses) Other gains and losses includes any other gains or losses
required by accounting standards to be recognised
outside of a charity’s income and expenditure account.
Others gains or losses are explained in the Charities
Statement of Recommended Practice (FRS 102 SORP) at
paragraphs 4.65 and 4.66.

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Section 3: Statement of financial activities (SoFA) (cont)

Row Analysis category Explanation

S20 Net movement in funds Total of rows S15 to S19.
S21 Total funds brought forward The brought forward balances at the beginning of the
year.
S22 Total funds carried forward Total of rows S20 and S21.

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Section 4: Balance sheet

The balance sheet provides a “snapshot” of the charity’s assets and liabilities at the end of the financial year.
The FRS 102 Charities’ SORP requires a breakdown of the assets and liabilities of the charity between
unrestricted and restricted income funds and endowment funds. The pro forma accounts provide this
breakdown by the use of a columnar balance sheet with the assets and liabilities of each fund category
being entered in the separate columns provided. A charity can alternatively provide a breakdown in a note
to the accounts.

Columns – fund accounting

F01 to F05 describe what should be entered into each column

F01 This column is for all assets and liabilities that belong to unrestricted income funds.
F02 This column is for all assets and liabilities that belong to restricted income funds.
F03 This column is for all assets and liabilities that belong to endowment funds.
F04 Total of columns F01, F02 and F03 giving total assets and liabilities for all funds.
F05 This column gives total assets and liabilities of all funds for the previous year.

Rows – assets and liabilities

B01 to B23 describe what should be entered into each row of the balance sheet.

Row Analysis category Explanation

B01 Intangible assets Intangible assets are non-monetary fixed assets that do
not have physical substance but are identifiable and are
controlled by the charity through custody or legal rights.
They include such things as goodwill, concessions,
patents, licences and trademarks.
Intangible assets are explained in the Charities
Statement of Recommended Practice (FRS 102 SORP) at
paragraphs 10.18.
B02 Tangible assets Tangible fixed assets, such as land and buildings, plant,
vehicles and equipment, are held to provide an on-
going economic benefit to the charity through their
contribution to the provision of goods or services by the
charity. They are defined in the Charities Statement of
Recommended Practice (FRS 102 SORP) at paragraphs
10.25 to 10.26.

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Section 4: Balance sheet (cont)

Row Analysis category Explanation

B03 Heritage assets Heritage assets are assets with historic, artistic,
scientific, technological, geophysical or environmental
qualities that are held principally for their contribution to
knowledge and culture.
Heritage assets are defined in the Charities Statement of
Recommended Practice (FRS 102 SORP) at paragraphs
10.39 to 10.40.
B04 Investments Fixed Asset Investments are held for the long term to
generate income or gains and may include quoted and
unquoted shares, bonds, gilts, common investment
funds, investment property and term deposits held as
part of an investment portfolio.
Fixed asset investments include programme-related
investments and are defined in the Charities Statement
of Recommended Practice (FRS 102 SORP) at paragraphs
10.41 to 10.56.
B05 Total fixed assets Total of B01 to B04.
B06 Stocks This is the total amount of stock held at the year
end. Stock is defined in in the Charities Statement of
Recommended Practice (FRS 102 SORP) at paragraph
10.59.
B07 Debtors Debtors are amounts owing to the charity for goods or
services or amounts the charity has paid in advance.
Debtors are defined in the Charities Statement of
Recommended Practice (FRS 102 SORP) at paragraph
10.64.
B08 Investments Current asset investments are investments held for
resale or cash or cash equivalents with a maturity date
of less than 1 year and are defined in the Charities
Statement of Recommended Practice (FRS 102 SORP) at
paragraph 10.70.
B09 Cash at bank and in hand This is the total of cash held and bank balances. The
Charities Statement of Recommended Practice (FRS 102
SORP), paragraph 10.74 provides details.
B10 Total current assets Total of B06 to B09.
B11 Creditors: amounts falling due These are the amounts owing by the charity to creditors
within one year which are due to be paid within one year from the
balance sheet date.
B12 Net current assets/(liabilities) Total of B10 less B11.

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Section 4: Balance sheet (cont)

Row Analysis category Explanation

B13 Total assets less current liabilities Total of B05 and B12.
B14 Creditors: amounts falling after one These are amounts owing by the charity to creditors
year which are due to be paid after more than 1 year from
the balance sheet date.
B15 Provisions for liabilities Provisions for liabilities are amounts set aside for future
liabilities and charges.
B16 Total net assets or liabilities Total of B13 to B15.

Rows – funds of the charity

The total funds entered below must agree with the net assets at row B16 of the balance sheet and the total
funds entered at row S22 of the SoFA.

Row Analysis category Explanation

B17 Endowment funds Endowment funds are those funds which the charity
must hold and retain and not spend as income. The
income arising is used for charitable purposes and
capital gains are retained within the fund. Include here
both permanent and expendable endowment.
The Charities Statement of Recommended Practice (FRS
102 SORP), paragraphs 2.16 to 2.20 provide details.
B18 Restricted income funds Restricted funds are those funds which must be spent
as income on the particular purposes specified by the
donor or specifically identified in appeal literature.
The Charities Statement of Recommended Practice (FRS
102 SORP), paragraphs 2.8 to 2.15 provide details.
B19 Unrestricted funds Unrestricted funds are those funds that can be spent at
the discretion of the charity trustees for any purposes
of the charity. The fund balance represents the
unexpended resources held within the fund, that is, its
assets less liabilities.
If some of these funds have been designated or
earmarked to meet planned future expenditure, these
amounts will be disclosed here.
The Charities Statement of Recommended Practice (FRS
102 SORP), paragraphs 2.6 to 2.7 provide details.

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Section 4: Balance sheet (cont)

Row Analysis category Explanation

B20 Revaluation reserve A revaluation reserve represents the difference between
the cost or valuation of an asset when first recognised,
less any depreciation and its subsequent revalued
amount. While a revaluation reserve will often form
part of the unrestricted funds of the charity, any part
of the reserve derived from the revaluation of assets
held within a restricted fund must be shown as part of
restricted funds.
B21 Total funds Total of B17 to B20 giving Total Funds. Must agree to
B16, Total Net Assets or Liabilities.

Section 4: Balance sheet

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Section 5: Notes to the accounts

Every set of company accounts require notes which explain:

• The basis on which the accounts have been prepared (note 1)
• The accounting policies that have been adopted which explain when assets and liabilities, income
and expenditure are included in the accounts and at what value (note 2.2).
• Other information required to provide more details of what the accounting statements contain and
to ensure that the accounts provide a “true and fair” view.
The table below explains what should be included in each of the notes provided.

Information to be provided in the notes to the accounts:

Note 1 The basis of accounting explains the standards and conventions used in preparing the
accounts. Details must also be given if there is a change of accounting policies, a change in
accounting estimates or material prior year errors.
Note 2 Accounting policies explain how items are measured, recognised and disclosed in the accounts.
When first reporting under FRS2102, section 35 of FRS102, requires 3 reconciliations to be
presented, if all are applicable. These are included at 2.1.
The list provided in this note show the policies applying to most small charities. Where a
particular policy applies to your charity, tick the ‘yes’ box; if the policy does not apply, tick the
‘no’ box; or if the policy does not apply because the item is not relevant to your charity, tick
‘N/a’. If a charity has a material item in the accounts which is not covered by the accounting
policies specified, then a note should be added in the box provided.
Note 3 Note 3.1 allows trustees to provide an analysis of any of the amounts shown under the main
headings under income in the SoFA. An analysis of “Donations and legacies”, “income from
investments” and “other” has been provided. For the other categories of income (charitable
activities, separate material item of income and other trading activities you may provide a
description of the particular activities under these headings.
The total entered for each of these categories should agree with the totals entered in lines
S01 to S06 in the SoFA.
Where relevant, please complete the additional information boxes.
Note 4 All charities in receipt of government grants must complete note 4. Paragraph 5.58 of the
Charities SORP provides full details.
Note 5 All charities receiving donated goods, facilities or services must complete note 5. Paragraph
6.31 of the Charities SORP provides full details.

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Section 5: Notes to the accounts (cont)

Note 6 Note 6 allows trustees to provide an analysis of any of the amounts shown under the
headings under expenditure in the SoFA. An analysis of Expenditure on raising funds has
been provided. For the other categories of expenditure (expenditure on charitable activities,
separate material expense item and other expenditure) you may provide a description of the
particular activities under these headings.
The total entered for each of these categories should agree with the totals entered in lines
S08 to S11 in the SOFA.
Where relevant, please complete the additional information boxes.
Note 7 Events and transactions falling outside a charity’s ordinary activities are by their nature
extremely rare and are referred to as extraordinary items. Where such transactions have
occurred in the financial year, please complete note 7. Paragraphs 4.16 to 4.18 of the
Charities SORP provide guidance.
Note 8 Note 8 must be completed where a charity has acted as agent during the reporting period.
Paragraphs 19.12 and 19.13 of the Charities SORP provide further information.
Note 9 This note provides details about support costs. This note must be completed where the
charity adopts the “activity” categories of the SORP to analyse expenditure. Support costs
cannot be attributed to a single activity and include the cost of certain central or regional
functions, for example, governance costs, payroll administration, purchasing, budgeting and
accounting, information technology, personnel, building management services and finance.
The note should show the amount of support costs that have been allocated or apportioned
across the activity categories of the charity, the method of allocating costs to activities and
the accounting policy adopted for the apportionment of costs between activities and any
estimation techniques used to calculate their apportionment.
Note 10 This note provides specific information about fees paid for examination of the accounts. This
is explained in paragraph 9.23 of the Charities SORP.
Note 11 This note provides specific information about staff costs (transactions with trustees are dealt
with in Note 14 but see definition of ‘key management personnel’). Details of the disclosures
can be found in the Charities SORP paragraphs 9.26 to 9.30 and 17.21.
An ex gratia payment is a payment, or the waiver of a right to an asset which the trustees
have no legal obligation or legal power to make from the charity’s funds but which they
believe they have a moral obligation to make. Occasional gifts of small and inexpensive
items such as flowers or chocolates should not be regarded as ex-gratia payments. Ex gratia
payments to trustees are covered in note 14.
Key management personnel are defined in Appendix 1 of the charities SORP. The definition
includes trustees and those members of staff who are the senior management personnel to
whom the trustees have delegated authority or responsibility in the day-to-day running of
the charity.
Note 12 This note must be completed where a charity has a defined contribution pension scheme
or a defined benefit scheme accounted for as a defined contribution scheme. Details of
the disclosures can be found in paragraphs 17.21 to 17.23 of the Charities SORP.

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Section 5: Notes to the accounts (cont)

Note 13 The grant making note provides further information about the purposes for which grants
were made and institutions supported. This note is only required if grant making is a
material part of the charities activities.
The Charities SORP requires that where a charity has made grants to institutions that
the charity should provide details of a sufficient number of institutional grants to give a
reasonable understanding of the range of institutions that it has supported.
Information may only be omitted from Note 13.2 if:
• Details of institutional grants are set out in the Trustees’ Annual Report.
• Details of the charity’s web page URL at which the information can be accessed is given.
• The trustees have exercised their right (following the Charities Act) not to disclose
details of the grants made where the settlor, their spouse or civil partner are still alive.
The settlor is the benefactor who established the trust by way of gift.
or
• Disclosure could result in a serious prejudice to the grant maker and /or the recipient
institution or individual working for the recipient institution. Situations where serious
prejudice is clearly indicated include those where disclosure could result in serious
personal injury. In such cases, the charity must state as part of its disclosure of
material grants made to institutions:
• the total number, value and general purpose of those grants where these details
have not been disclosed; and
• that an exemption applies top disclosure on the grounds of serious prejudice.
See paragraphs 16.13 to 16.25 of the Charities SORP for full details.

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Section 5: Notes to the accounts (cont)

Note 14 The tangible fixed assets note provides information about the assets used by the charity to
undertake its activities. The column headings provide an analysis of fixed assets as per Table
6 FRS102 SORP.
Charities must disclose the depreciation method used and the depreciation rate, see
paragraph 10.37 FRS102 SORP for full disclosures. The methods of depreciation specified in
the template are straight line or reducing balance. If another method is used please specify
in the box provided.
The total amounts for net book value at the end of the year entered in this note need to
agree to the amount entered for tangible fixed assets in the balance sheet.
An impairment loss occurs when the carrying amount of an asset exceeds its recoverable
amount. The impairment loss reflects a decline in the future economic benefits over and
above the depreciation charged for the assets use, see module 12, FRS 102 SORP. Charities
must disclose a description of the events and circumstances that led to the recognition or
reversal or an impairment loss.
If any tangible fixed assets are included at a valuation, please complete note 14.5.
“Other disclosures” require information that must be disclosed by the charity under paragraph
10.37 FRS 102 SORP.
Note 15 This note must be completed where the charity holds intangible fixed assets.
Charities must disclose the amortisation method used and the amortisation rate, see
paragraph 10.24 FRS 102 SORP for full disclosures. The methods of amortisation specified in
the template are straight line or reducing balance. If another method is used please specify
in the box provided.
The total amounts for net book value at the end of the year entered in this note need to
agree to the amount entered for intangible fixed assets in the balance sheet.
An impairment loss occurs when the carrying amount of an asset exceeds its recoverable
amount. The impairment loss reflects a decline in the future economic benefits over and
above the depreciation charged for the assets use, see module 12, FRS 102 SORP. Charities
must disclose a description of the events and circumstances that led to the recognition or
reversal or an impairment loss.
If any intangible fixed assets are included at a valuation, please complete note 15.6.
“Other disclosures” require information that must be disclosed by the charity under paragraph
10.24 FRS 102 SORP.

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Section 5: Notes to the accounts (cont)

Note 16 The heritage assets note provides information about the assets used by the charity to
undertake its activities. The column headings provide an analysis of fixed assets as per Table
6 FRS 102 SORP.
Charities must disclose the depreciation method used and the depreciation rate, see
paragraph 10.37 FRS102 SORP for full disclosures. The methods of depreciation specified in
the template are straight line or reducing balance. If another method is used please specify
in the box provided.
The total amounts for net book value at the end of the year entered in this note need to
agree to the amount entered for heritage assets in the balance sheet.
An impairment loss occurs when the carrying amount of an asset exceeds its recoverable
amount. The impairment loss reflects a decline in the future economic benefits over and
above the depreciation charged for the assets use, see module 12, FRS 102 SORP. Charities
must disclose a description of the events and circumstances that led to the recognition or
reversal or an impairment loss.
If any heritage assets are included at a valuation, please complete note 16.6.
Where heritage assets are not recognised on the balance sheet, please complete note 16.8.
A five year summary of heritage assets transactions must be included per paragraph 18.26,
FRS 102 SORP.

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Section 5: Notes to the accounts (cont)

Note 17 The investments note is used to provide further information about investments held.
Guidance on accounting for and disclosures relating to investments can be found in
paragraphs 10.41 to 10.56, FRS 102 SORP. You may also need to consult modules 11 and 21
FRS 102 SORP.
Fixed asset investments in quoted shares, traded bonds and similar investments and
investment properties must be measured initially at cost and subsequently at fair value (their
market value) at the balance sheet date (paragraph 10.44/10.48 FRS 102 SORP). Investments
in shares which cannot be publically traded must be measured at cost less impairment if fair
value cannot be established using a valuation technique (paragraph 11.17 FRS 102 SORP).
Social investments may be measured at either fair value or cost less impairment at the year
end date. You will need to consult module 21, FRS 102 SORP, for full guidance.
Note 17.1 provides an analysis of investments at their year end value (fair value or cost
less impairment) and shows movements during the financial period. Note 17.2 provides
an analysis of investments at their year end value, specifying whether this is at fair value
or at cost less impairment. The totals in notes 17.1 and 17.2 must agree to the totals for
investments in the balance sheet.
Where a charity holds investment properties, note 17.3 must be completed.
Note 17.4 must be completed when current asset investments are held by the charity.
As per paragraph 21.41 FRS 102 SORP, please provide details of guarantees.
Concessionary loans are made wholly or in part to advance charitable purposes for the
benefit of a charity’s beneficiaries, interest free or at below prevailing market rates. Please
complete note 17.6 where your charity has made concessionary loans.
Some additional information must be provided in note 17.7.
Note 18 This note must be completed where the charity holds stocks at the year end. Stocks are
items that will be used by the charity in providing goods and services. Stocks may include
goods held for distribution to beneficiaries, or educational literature or brochures for
distribution. Please refer to paragraphs 10.59 to 10.63 FRS 102 SORP for guidance.
Note 19 The debtors and prepayments note is used to provide further information about amounts
owed to the charity. The total amount entered in this note needs to agree to the amount
entered for debtors in the balance sheet.
If material to the disclosure of debtors, the amount of debtors recoverable more than a year
after the reporting date must be separately disclosed in the notes to the accounts.
Note 20 The creditors and accruals note is used to provide further information about the amounts
owed by the charity. The total amounts entered in note 20.1, Analysis of creditors, needs to
agree with the amounts entered for ‘Creditors: amounts falling due within one year’ and
‘Creditors: amounts falling due after one year’ in the balance sheet.
Please complete note 20.2 deferred income, where the charity has deferred income.

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Section 5: Notes to the accounts (cont)

Note 21 Note 21, provisions for liabilities and charges must be completed where the charity has
expenditure resulting from recognised funding commitments and it must recognise a liability
for a legal or constructive obligation as a provision when either the timing or the amount of
the future expenditure required to settle the obligation is uncertain. A provision is recognised
when:
• A charity has a present obligation (a legal or constructive obligation that exists at the
balance sheet date) as a result of a past event.
• t is probable that a transfer of economic benefits will be required to settle the
obligation.
• The amount can be reliably estimated.
See module 7, FRS 102 SORP for guidance.
Note 22 Where relevant, complete this note requiring other disclosures for debtors, creditors and
other basic financial instruments. Paragraph 11.35 of the Charities SORP provides detail.
Note 23 Contingent assets and contingent liabilities are defined in appendix 1, FRS 102 SORP. Please
complete note 23, contingent liabilities and contingent assets, where applicable to your
charity.
Note 23.4 must be completed if applicable to your charity.
Note 24 Cash at bank and in hand is held to meet short term cash commitments as they fall due
and includes all cash equivalents held in the form of short term highly liquid investments. A
cash equivalent will normally have a short maturity date of, say, three months from the date
of acquisition.
Note 25 Where assets and liabilities are measured at fair value through the profit and loss account,
information must be given about the risks to which the charity is exposed at the end of the
reporting period. This must be provided in note 25.1.
Further detail must be given about the changes in fair value attributable to changes in credit
risk in note 25.2.
Note 26 The events after the end of the reporting period note provides information about events
that occur after the end of the reporting period but before the accounts are authorised which
relate to conditions that arose after the year end. Examples of such events are provided in
paragraph 13.7 FRS 102 SORP.
Note 27 The charity funds note is used to provide details of the movements of material individual
funds in the reporting period. Fair value and revaluation reserves will need to be allocated
to the relevant fund included in the list; the only exception to this is where fair value and
revaluation reserves are wholly unrestricted. A balancing figure, ‘other funds’, is needed to
provide a reconciliation to total funds in the balance sheet. Note 27.1 relates to current year
information; note 27.2 relates to previous year information.
Guidance on fund accounting is in module 2 FRS 102 SORP.
Where there are any transfers between funds details must be provided in note 27.3.
Further information on designated funds must be provided in note 27.4.

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Section 5: Notes to the accounts (cont)

Note 28 The transactions with trustees and related party note provides information about any
transaction entered into by the charity with its trustees or others connected with the charity.
Related parties are defined in the glossary of terms, appendix 1, FRS 102 SORP.
Transactions with related parties that do not require disclosure are listed in paragraph 9.18
FRS 102 SORP.
Note 28.1 provides an analysis of trustee remuneration and benefits. The amount of any
ex gratia payments made must be disclosed here. See note 11 for explanation of ex gratia
payment.
Where a trustee/director has received a payment for ‘loss of office’, the amount must be
disclosed in 28.1.
Note 28.2 provides an analysis of trustee expenses which are expenses incurred by trustees
in fulfilling their duties, for example travelling to meeting or visiting charity facilities or
activities to understand or monitor what is taking place.
Note 28.3 provides information of transactions with related parties.
Note 29 This note may be used to disclose any important matters that are not included in the pro
forma accounts.

Charity accounts templates – non-company: completion notes October 2016