Charity Accounting Report : Charity

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AE1 Charity Accounting Report

Charity: “An organization set up to provide help and raise money for those in need” http://www.oxforddictionaries.com/definition/english/charity [last viewed on 19/03/15 ]

Any company aim is to increase the profit for the share holders, receive dividend (distribution of profits) in order to invest again or issue shares (selling part of the capital, method mainly used by big business to avoid asking bank loans and have liquidity – cash flow), take bank loans, while non for profit organization aim, is not to gain profit or save money but to spend for social purposes, explaining how the money was spent. There are four main types of charities structure; Charitable incorporated organization, Charitable Company,
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In England and Wales charity accounts are regulated by the following acts; Charity Act 1993, Charities (Accounts and Reports) regulations 1995 and 2000, Charity act 2011, Charities SORP (Statement Of Recommended Practice) and by the body of Charity Commission Directions and Guidance. The charity accounting framework in UK, is the SORP 2005 that was up to dated, in 2015, and it is compulsory, which means is required by law, furthermore, there are two accounting stands, F. R. S. S. E. only for small entities with a turnover not more than £ 632’000 balance sheet of £ 316’000 (value of the assets) or less and with a max of 10 employees (financial reporting standard for smaller entities, last up to dated - 2015) and F.R.S. 102, (Financial Reporting Standard, “international standard”), mainly used by medium – big size organization, the difference between the two is, the first one (F. R. S. S. E.) is for small entities only, while the second one (F. R. S. 102) can be used by any charity organisation, both big and small, although, is not recommended to small entities as it is much complex and might require a trained person.
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