Charities SORP 2026: New guidance on lease accounting explained

The Charities SORP-making body has this week (8 October) published a new helpsheet for charities and their advisers to help understand the changes to lease accounting requirements. 

The guidance is aimed at charities preparing accruals accounts and provides practical examples to help them understand how the new requirements, introduced through changes to FRS 102 and reflected in SORP 2026, should be applied. SORP 2026 is applicable for periods commencing on or after 1 January 2026. 

Lease accounting can be a complex area, particularly for charities with different types of lease arrangements. The new helpsheet is therefore a welcome addition to the guidance already available, helping charities understand what they need to consider when preparing their accounts. 

The helpsheet looks at three key areas: 

• Identifying leases: Understanding which arrangements are treated as leases and whether any exemptions apply. 
• General lease accounting: How the accounting requirements should be applied to more typical lease arrangements. 
• Peppercorn and social donation leases: The particular accounting considerations for these arrangements. 

Not every section will be relevant to every charity. However, the SORP-making body recommends that all charities start with the first section to help determine which of the remaining guidance applies to them. 

While the helpsheet provides useful practical examples, it cannot address every circumstance a charity may face. Charities with more complex arrangements may still need additional advice. 

We would encourage charity trustees and finance teams to take a look at the helpsheet and consider whether there are any implications for their existing lease arrangements. 

The new lease accounting helpsheet can be found on the Charities SORP website.  

If you have any questions about the new requirements or would like to discuss what they mean for your charity, please contact our specialist charity team.