What is SORP?
The Statement of Recommended Practice, endearingly nicknamed SORP, is not some ancient tome locked away in a dusty archive. No! It’s a crucial mystic scroll for accountants working in specific industries in the UK. Think of it as your very own industry-specific spellbook guiding you through the labyrinthine world of accounting practices.
So, what is SORP exactly? Well, it’s a non-mandatory (read: you won’t get thrown into accounting jail if you ignore it, but why would you?) statement dealing with accounting topics relevant to a particular industry or sector. Just like a personalized coffee order, it’s tailored to the unique needs and quirks of different industries.
The Birth of a SORP ☕
Who waves the magic wand to create these gem-like statements? Recognized bodies within the industries concerned pull their accounting hats together and craft these beauties. But just like a celebrity endorsement, these statements need to be approved by the Financial Reporting Council (FRC) to be considered legitimate. This rigorous approval process is whimsically called franking. Once we have a franking stamp of approval, we get the glory of what we fondly call franked SORPs.
Fig 1: Franking process in action (metaphorically speaking)
pie title SORP Creation Process
