Topic

Practitioner Perspective on Accounting from Income for Legacies by Legacy Link

The charities’ statement of recommended practice (SORP) provides specific guidance for how a charity recognizes income for accounting and reporting purposes. 

SORP is designed to help charity trustees meet their legal requirement for their accounts.  It enables the charity to give a true and fair view of it’s financial position and encourages consistency in how the charity recognizes its legacy cases – residuary, pecuniary or specific. 

A charity needs to be able to provide evidence of confirmation of entitlement (a valid will), date of death, how the value of the income has been calculated, whether the income is restricted or unrestricted and when the income is anticipated to be received. 

By agreeing a clear Accounting Policy with your auditors, this can ensure a smooth accrual calculation at the financial year end.