RPs advised to prepare now for major updates to accounting standards

Key changes include how revenue is recognised, accounting for leases, and fair value as well as implications for capitalisation, grant accounting and provisions.

Leases will come onto the balance sheet, which will be a key change for organisations with significant off-balance-sheet contracts.

The new five-step model for revenue recognition involves identifying the promises within a contract and their transaction prices in order to recognise the revenue when the promise is delivered.

For example, Ms Poulter said: “One area that will be a challenge is service charges. What is the transaction price of mowing the lawn… and how and when is that income recognised?”

While the SORP will not be consulted on until late 2025, she said registered providers could prepare by making a register of contracts. “Start thinking about what contracts and leases you have and look through the models already out there in FRED 82,” she said.

The final version of the SORP will be published by April 2026 and providers will produce their first compliant accounts in December 2026 or March 2027 depending on their year end date.