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Draft Regulations Annex A
Scottish Statutory Instruments
2009 No.
CHARITIES
The Charities Accounts (Scotland) Amendment Regulations2009
Made - - - - 2009
Laid before the Scottish Parliament 2009
Coming into force in accordance with regulation1
The Scottish Ministers make the following Regulations in exercise of the powers conferred by section44(4) and (5) of the Charities and Trustee Investment (Scotland) Act 2005( 1) and all other powers enabling them to do so.
Citation, commencement, transitional and saving provision
1. -(1)These Regulations may be cited as the Charities Accounts (Scotland) Amendment Regulations 2009 and come into force on 1stApril 2010.
(2) The amendments made by regulations 3(b) and (c), 7(a) and (b) and 9 do not apply in relation to any accounts covering a financial year which ends before 1st April 2010.
(3) Notwithstanding its revocation by regulation 8, regulation 12 of the Charities Accounts (Scotland) Regulations 2006( 2) (audit exemption for charities which are companies) shall continue to operate in relation to any statement of account of a charity which is a company and which covers any date prior to 1st April 2010.
Amendments to the Charities Accounts (Scotland) Regulations 2006
2. The Charities Accounts (Scotland) Regulations 2006 are amended as follows.
3. Regulation1(2) (interpretation) is amended as follows-
(a) for ""consolidated adjustments" means" substitute ""consolidation adjustments" means",;
(b) for the definition of "gross income" substitute ""gross income" means the total recorded income of the charity from all sources;" and
(c) in the definition of "the SORP", after "means", insert "the second edition (published 2008) of".
4. In regulation 4(1) (accounting records), for "sufficient" substitute "adequate".
5. In regulation6(1) (consolidated accounts), for "consolidated adjustments" substitute "consolidation adjustments".
6. Regulation7 (connected charities) is amended as follows-
(a) for paragraph(1) substitute-
"(1)Connected charities may prepare a single set of accounts.";
(b) in paragraph(2), for "accounts collated into a single document, the document" substitute "such accounts, they", and
(c) in paragraph(4), for "accounts collated into a single document, the accounts" substitute "such accounts, they".
7. Regulation10 (annual audit of statement of account) is amended as follows-
(a) in paragraph(1)(b), for "in a financial year" substitute "at the end of the financial year";
(b) after paragraph (1) insert-
"(1A) This regulation also applies where regulation 6(1) requires a charity to prepare consolidated accounts.", and
(c) in paragraph (4)(f)(iii), after "2005" insert "Act".
8. Regulation12 (audit exemption for charities which are companies) is revoked.
9. In regulation14(3) (preparation of statement of account in special cases), for paragraphs(a) and (b) substitute-
"(a) the Statement of recommended practice: accounting for further and higher education issued by Universities UK on the 26thOctober 2007, and
(b) the Statement of Recommended Practice ( SORP): accounting for registered social landlords 2008 issued by the National Housing Federation, Community Housing Cymru and the Scottish Federation of Housing Associations on the 12thMay 2005.".
EXPLANATORY NOTE
(This note is not part of the Regulations)
These Regulations amend The Charities Accounts (Scotland) Regulations 2006 ("the 2006 Regulations").
Regulation3 amends regulation1 of the 2006 Regulations to simplify the definition of "gross income", in line with current accounting practice, and in consequence of a correction made by regulation 5 to the wording of regulation 6 of the 2006 Regulations. It also amends a reference to the Statement of Recommended Practice for Accounting and Reporting by Charities, an updated edition having been issued.
The Charities and Trustee Investment (Scotland) Act 2005 requires charities to keep 'proper' accounting records, and company law requires charitable companies to maintain 'reasonable and adequate' records. Regulation 4 of the 2006 Regulations refers to records which are "sufficient to show and explain the transactions of the charity". This wording has given auditors difficulty, as it appears to introduce a different requirement. Regulation 4 of these regulations amends that wording to "adequate", to reduce the difficulty.
Regulation6 amends regulation7 of the 2006 Regulations to clarify that the requirements for production of a single set of accounts by connected charities do not require the production of individual accounts within that set.
Regulation 7(a) amends regulation 10 of the 2006 Regulations to clarify that consolidated accounts must be audited by a qualified auditor. Amongst other matters, regulation 10 of the 2006 Regulations makes audit provision for charities whose assets have an aggregate value exceeding £2.8 million. Regulation7(b) bases that calculation of assets on a figure in the charity's statement of accounts, to assist in ascertaining whether that audit provision applies to a particular charity. Regulation 7(c) corrects a typographical error in the 2006 Regulations.
Regulation 8 revokes an exemption from audit requirements that is no longer required. There is a saving provision at regulation 1(3) for accounts covering dates prior to 1 April 2010, to maintain the exemption for accounts not submitted to the Office of the Scottish Charity Regulator prior to that date.
Regulation 9 requires that some accounts be prepared in accordance with more recent versions of two Statements of Recommended Practice.
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