Under the 2006 Regulations, receipts and payments accounts must consist of:
Both the statement of balances and the trustees’ annual report must be signed by one or more of the charity trustees on behalf of all the charity trustees and specify the date on which both were approved.
To allow comparisons to be made, all figures in the accounts must include the corresponding amount for the previous financial year.
The accounts must also distinguish between restricted, unrestricted, expendable and permanent endowment funds held by the charity.
OSCR has produced a receipts and payments work pack that can be used to assist with the preparation of receipts and payments accounts. The work pack includes detailed guidance and templates that can be completed.
A charity’s financial statements alone do not provide all the information a reader would need to gain a full picture of the charity. The financial statements cannot easily explain:
The financial statements also do not provide information on the structure, governance or management arrangements of a charity. All of these should be addressed in the trustees’ annual report which is an important element of a charity’s annual reporting. Charity trustees should be actively involved in preparing it. The report should enable a reader to understand how the numerical information presented in the financial statements relates to the organisational structure and activities of the charity.
The trustees’ annual report must include the following information:
Where the charity does not have an office the annual report must give the name and address of one of the charity trustees, unless the charity is entitled to exclude the address from its entry in the Register because OSCR is satisfied that to include this information would jeopardise the safety or security of people or premises
See our Charity Reserves factsheet for more information on reserves and reserve policies.
The Trustees’ Annual Report must be signed by one or more charity trustees on behalf of all the charity trustees and specify the date on which the statement of account, of which the trustees’ annual report forms part, was approved.
We have specific guidance on Trustee Annual Reports which sets out the legal requirements and good practice.
The statement of receipts and payments provides an analysis of the incoming and outgoing cash and bank transactions for the year. The analysis must show the following categories separately:
should be shown separately from the above receipts.
should be shown separately from the above payments.
The statement of receipts and payments must distinguish between unrestricted and restricted funds, as well as any expendable and permanent endowment funds. This is usually achieved by giving each fund a separate column in the accounts. Where a charity has more than one fund in any of these categories it should present the total funds held in each. The notes to the accounts must then explain in sufficient detail the content of the unrestricted, restricted and endowment funds so that the reader gains a full understanding of the accounts.
Any transfers from a restricted, unrestricted, expendable endowment or permanent endowment fund into another fund must be shown separately from the receipts and payments.
As well as a statement of receipts and payments, the accounts must contain a statement of balances. The statement must reconcile the cash and bank balances at the beginning and end of the financial year with the surplus or deficit shown in the statement of receipts and payments.
As with the statement of receipts and payments, the statement of balances must distinguish between restricted and unrestricted funds, as well as any expendable or permanent endowment funds held by the charity.
In addition the statement of balances must also:
The statement of balances must be signed by a charity trustee on behalf of all the charity trustees and specify the date on which the statement of account was approved by the charity trustees.
Notes are an important part of the accounts. They expand on or explain the information contained in the statements of receipts and payments and balances, and will help a reader understand the accounts.
The notes to the accounts must contain the following information, unless this information has been provided in the Trustees’ Annual Report:
To assist charities OSCR has published example sets of accounts which illustrate receipts and payments accounts that comply with the 2006 Regulations. These example accounts can be found at Section 6.
It should not be assumed that the examples show the only way of presenting an item or that they include all the disclosures for a particular type of charity. Indeed many charities may choose to provide more detailed notes than those required by the 2006 Regulations. Any examples provided by OSCR are not designed to be used as a substitute for reference to sections 3.1 to 3.4 in this Part of the Guide and the 2006 Regulations.