This page provides information on the format and independent scrutiny requirements for Scottish charity accounts.
The Charities Accounts
(Scotland) Regulations 2006 sets out the format and independent
scrutiny requirements for charity accounts. These Regulations
have been amended and changes introduced in 2011.
Our guidance Scottish
Charity Accounts: an updated guide to the 2006 Regulations
will assist charities to understand their accounting requirements
under the legislation. The guidance has been updated to
reflect the 2011 changes. We have prepared some Frequently Asked
Questions (FAQ's) and answers to assist charities with
understanding these changes.
We have also designed a Receipts
and Payments work pack to help charities - especially smaller
non-company charities - who may not have the resources to employ
the services of a professional accountant to prepare annual
accounts. The work pack also assists charity trustees to fulfill
their good governance responsibilities by providing an outline of
those areas that must be covered in the Annual Report.
Charity accounts must be prepared in one of two ways:
& payments accounts are a simple form of accounting that
consist of a summary of all monies received and paid via the bank
and in cash by the charity during its financial year, along with a
statement of balances.
The Office of the Scottish Charity Regulator and the Charity
Commission for England and Wales, as the joint SORP-making body for
charities, have developed a new Exposure Draft of Charities SORP,
which affects charities preparing accounts under the accruals
basis. You can read the draft and give
your comments here.
Accounts prepared using the accruals basis allocate the costs or
income of a particular activity according to when the liability is
incurred or when there is entitlement or certainty about income.
This is not necessarily the date on which money is received or paid
out. Accounts prepared using the accruals basis must be
prepared in accordance with the methods and principles of the Accounting and Reporting by
Charities: Statement of Recommended Practice (the 2005
What type of accounts should be prepared?
The charity's gross income for a given financial year will
determine the type of accounts to be prepared for that particular
year. However, if:
- the charity's constitution says it should prepare accrued
- the charity trustees have taken a decision to prepare accrued
- any enactment says that the organisation should prepare accrued
then accrued accounts must be prepared even if the charity's
gross income would otherwise allow accounts to be produced on the
receipts & payments basis.
Further guidance about charity accounting and our requirements
is available from our Scottish Charity
Accounts: an updated guide to the 2006
Regulations. The guidance is split into three
Part 1: The Overview should
be read in conjunction with either Part 2 or Part 3 depending on
the type of accounts a charity prepares. It contains two flow
charts to help charities determine the type of accounts they should
prepare and the type of external scrutiny to which they should be
Part 2: Receipts and
Payments accounts. In addition to the guidance, there are
further examples of receipts and payments accounts available
as well as a work
pack to help charities prepare receipts and payments
Part 3: Fully Accrued
Any parent charity where the gross income of the group (the
parent charity and its subsidiaries) is £500,000 or more after
consolidation adjustments, must prepare group accounts under the
Charities and Trustee Investment (Scotland) Act 2005 and associated
Charities Accounts (Scotland) Regulations 2006. However, where a
charitable company is required by section 399 of the Companies Act
2006 to prepare group accounts, those group accounts are prepared
under the Companies Act 2006, as well as the above Act and
Regulations. Please read the Accounting and Reporting by Charities:
Statement of Recommended Practice (the SORP 2005) for further
Under statutory requirements, the accounts of all Scottish
charities must also be externally scrutinised. That is, someone who
is independent of the charity must review the accounts and produce
a report, attached to the accounts, that highlights any issues to
Please read our External Scrutiny page
for further information and guidance on how to ensure the correct
form of external scrutiny is applied to charity accounts.