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The helpsheet explains the lease accounting requirements for charities preparing accruals accounts, following amendments reflected in the new Charities SORP.

The Charities SORP-making body have published a helpsheet to support charities and their advisors in understanding the new lease accounting requirements that are applicable to charities producing accruals accounts. The new SORP sets out the new lease accounting requirements as they apply to charities following amendments to UK financial reporting standard (FRS 102) introduced by the Financial Reporting Council.

The lease accounting helpsheet cannot cover all situations or arrangements but is an additional resource provided to aid practical implementation of the new requirements.  Charities may need to seek professional advice where required to ensure they comply with the relevant requirements.

The helpsheet has been prepared with input from the Charities SORP Committee is split into three parts and uses practical examples to help charities:

1. Determine whether or not a lease exists and what exemptions may apply;
2. Account for general leases; and
3. Account for peppercorn and social donation leases

Amie Woods, Assistant Director of Accountancy Services at the CCEW and Joint Chair of the Charities SORP Committee said:

We recognise that the changes to lease accounting may be challenging for some charities and we hope the helpsheet will support readiness in this space. We also welcome the support that the accountancy profession and sector bodies are providing to support SORP 2026 readiness and we encourage charities to engage with the new requirements as soon as possible and to take professional advice where needed.

Laura Anderson, Senior Manager Higher Risk Cases and Quality Assurance at OSCR and Joint Chair of the Charities SORP Committee said:

The helpsheet is published in three parts to allow users to find the information that is relevant to their charity and arrangements. We encourage charities to engage with the helpsheet to be clear on what preparatory work is needed at this time and to be ready for implementation at the appropriate time. Part 1 should be read by all users as this will help to determine whether parts 2 and/or part 3 are also relevant.

Padraig Quinn, Head of Compliance and Enquiries at CCNI and Joint Chair of the Charities SORP Committee said:

We hope that this additional resource will be beneficial to charities and advisors in preparing for and implementing the new lease accounting requirements within the SORP.  Taking time now to review the arrangements that charities have where lease accounting may apply will be invaluable in helping charities to comply with the requirements at the time of preparing their accounts.