Exchange Transactions - Trustees' Short Guide Series.

As charities prepare for the implementation of SORP 2026, understanding how to account for income received in exchange for goods or services is essential. Our Exchange Transactions Guide provides trustees and charity leaders with a practical overview of the new revenue recognition requirements, helping you apply the five-step model with confidence and ensure compliance with the latest accounting standards.

This concise guide is designed to help you navigate the complexities of exchange income, strengthen financial reporting processes and ensure income is recognised accurately and consistently. Using this guide, you’ll learn:

• What constitutes an exchange transaction under SORP 2026 and how to distinguish it from non-exchange income streams
• How the new five-step revenue recognition model applies to service contracts, memberships and other exchange arrangements
• How to identify performance obligations within contracts and determine whether goods and services should be recognised separately or together
• How to determine and allocate transaction prices, including the treatment of discounts, variable consideration and bundled services
• When income should be recognised at a point in time or over time, based on the transfer of control
• How to measure progress towards completing performance obligations and account for income received in advance
• The accounting implications of membership schemes, royalties and long-term contracts under the updated framework
• How to prepare for the transition to SORP 2026, including key considerations when reviewing existing contracts and documenting accounting judgements