Statement of Recommended Practice - or SORPs - are sector-driven recommendations on financial reporting, auditing practices and actuarial practices for specialised industries, sectors or areas of work, or which supplement Financial Reporting Council (FRC) standards and other legal and regulatory requirements. This is in the light of special factors prevailing or transactions undertaken in that particular industry, sector or area of work that are not addressed in FRC standards.
The Housing SORP 2014 applies to all registered social housing providers in the UK and provides essential guidance on, and interpretation of, accounting standards for the sector.
The FRC is the prescribed body for issuing accounting standards in the UK. In addition to adhering to accounting standards, housing associations are obliged to produce financial statements which comply with the Housing Statement of Recommended Practice (SORP).
SORPs may only be issued by SORP-making bodies (SMB). The SMB for housing is made up of the National Housing Federation (NHF), Community Housing Cymru (CHC), Northern Ireland Federation of Housing Associations (NIFHA) and the Scottish Federation of Housing Associations (SFHA). The SMB is responsible for developing and maintaining the Housing SORP.
In addition to this, there is a SORP Working Party (SWP). The SWP is responsible for advising the SMB on issues arising from the UK accounting framework relating to housing associations and carry out the detailed work of developing, drafting and maintaining the Housing SORP. Scotland is represented on the SWP by Jack Marshall from Trust HA and Lindsay Dryden from Hillcrest HA.
More details of the SMB and SWP are available on the NHF website here