Charity SORP 2026 – 5 changes for Irish non-profits

For many charities, financial reporting has followed a familiar pattern for years. The introduction of the Charity SORP 2026 doesn’t completely change the current process, but it does put more pressure on how well it holds together.

In this article, we explore what the changes mean for Irish charities and clarify the role of the charity trustee or director. While the new requirements apply across both Ireland and the UK, and the accounting framework is broadly aligned, there are important jurisdiction-specific differences in regulation and governance. Our colleagues have provided a more detailed analysis of the UK position.

The 2026 Charity SORP –  What these changes mean for Irish non-profits

The recent changes to the Charities Statement of Recommended Practice (SORP) place greater weight on how clearly a charity explains its activities, how its financial position is presented, and how consistent the reporting is across the full set of accounts.

Why was the SORP updated?

The SORP was updated to reflect broader changes in FRS 102. As the accounting standards evolve, the SORP follows to ensure that charity reporting remains aligned and up to date with international financial reporting standards. It is effective for reporting periods beginning on or after 1 January 2026.

Irish charities must also ensure that their reporting aligns with expectations set by the Charities Regulator, particularly where the Trustee’s Annual Report and financial statements are used to support annual returns and regulatory filings.

5 changes to the SORP that Irish charities need to consider

Several areas of the SORP have been updated. While the details will vary depending on the size and structure of each charity, a number of changes are likely to affect most organisations. These include:

1. Tiered reporting requirements

The introduction of a three-tier system means that the level of detail required in the accounts is now more clearly linked to the size of the charity.

The current thresholds are:

• Tier 1: income up to €500,000
• Tier 2: income between €500,000 and €15 million
• Tier 3: income over €15 million

For charities moving into Tier 2 or Tier 3, the most noticeable change is the level of detail expected in the Trustee’s Annual Report. This includes clearer explanations of activities, outcomes and how success is measured.

A common issue is that charities are not always aware they have crossed a threshold until late in the reporting process. Where that happens, additional disclosures often need to be pulled together quickly, which can put pressure on both finance teams and Trustees. We often see this where a charity’s income increases due to a one-off grant or funding arrangement, pushing it into a higher tier for the first time. In those cases, the underlying reporting process may not yet be set up to meet the additional requirements.

2. Trustee’s Annual Report

The Trustees’ Annual Report has been restructured to improve clarity and better connect the narrative with the financial statements. There is now more emphasis on explaining what the charity set out to do, what it achieved, and how that links to the figures in the accounts.

For example, where a charity reports significant expenditure on a programme, the expectation is that the report explains what that spend delivered, not just that it took place. The Trustee’s Annual Report is often the first document reviewed externally, including by the Charities Regulator, so it’s important that it reads clearly and ties back to the figures in the accounts.

3. Income recognition

The updated SORP introduces a clearer distinction between exchange transactions (such as contracts for services) and non-exchange transactions (such as donations and grants). This can require charities to look again at how income is classified.

For example, a service agreement with a local authority may previously have been treated in a similar way to grant income. Under the updated guidance, it may need to be assessed as a contract with specific performance obligations, which affects when income is recognised.

4. Lease accounting

More lease arrangements will need to be recognised on the balance sheet, rather than treated as an expense each year.

This can be particularly relevant where:

• Leases have been in place for a long time.
• Arrangements are informal or have rolled forward.
• Properties are provided below market rates.

In these cases, charities may need to identify and document arrangements that have not previously been captured in detail. This often involves revisiting older agreements or informal arrangements that have not been centrally recorded.

5. Reserves and going concern

There is greater emphasis on explaining the charity’s financial position, particularly where reserves are low or restricted. Where a charity has limited free reserves, it will need to explain how it continues to operate and what plans are in place. For example, where a charity holds restricted funds but has limited unrestricted reserves, it may need to explain how day-to-day operations are funded and how short-term financial pressures are managed.

What does this mean for Trustees and Secretaries?

The updated SORP puts more emphasis on oversight rather than just preparation.

Trustees should be in a position to understand:

• How income has been classified.
• How key figures in the accounts relate to activities during the year.
• The assumptions behind areas such as reserves and going concern.

This does not require detailed technical knowledge, but it does require visibility over how the information has been put together.

The role of the charity secretary has also evolved, with secretaries playing a key role in ensuring:

• Information is being captured across the organisation as the year progresses.
• Decisions and judgements are recorded at the time, rather than revisited later.
• There is enough time built into the process for review and challenge.

In many cases, the quality of reporting reflects how well information is shared between finance, operations and those responsible for oversight. Where this visibility is in place, year-end reporting tends to run more smoothly. Where it is not, issues often emerge late, when there is least time to address them.

How AAB can help

Navigating the changes introduced by Charity SORP 2026, meeting the expectations of the Charities Regulator, and ensuring compliance with your obligations under the Charities Act 2009 and the Charities (Amendment) Act 2024 presents a real challenge for many Irish charities.

At AAB, we work with a wide range of charitable organisations and support Trustees and Secretaries in understanding how these reporting requirements apply to their organisation.

If you would like to discuss how Charity SORP 2026 affects your Ireland-based charity, please contact our Non-Profit team, Brian Dunne or your usual AAB contact.