The impact of SORP 2026 on Academy Trusts

10 June 2026

The upcoming Charities SORP 2026 is set to bring some of the biggest reporting changes Academy Trusts have seen in years.

For Academy Trusts with year ends 31 August, the changes apply to financial statements for the 2026-27 financial year, not the 2025-26 accounts.

Although the changes don’t come into effect until 2027, Annex B of the Academies Accounts Direction (AAD) 2025-26 gives a useful preview of what’s coming. Academy Trusts should start to prepare now to avoid a last-minute rush.

For many trusts, it could mean updates to:

• Systems and processes
• Internal controls
• Financial reporting approaches

Lease accounting

One of the biggest changes under SORP 2026 is how leases are treated.

From the 2026-27 financial year, most leases held by academy trusts that were previously classed as operating leases will appear directly on the balance sheet, with:

• A right-of-use asset, and
• A corresponding lease liability

It is important to note that comparative figures won’t be restated when you transition. The impact of adopting the new rules will be reflected in the opening reserves.

If your trust has multiple property or equipment “operating leases”, it’s worth identifying them now as this will be a key area of impact when you get to the 2027 accounts.

Revenue recognition

SORP 2026 also introduces a new five-step model for recognising income from contracts. The new framework focuses on:

• Identifying the contract
• Understanding performance obligations
• Determining transaction value
• Allocating income
• Recognising income at the right time

For many trusts, grant income may be largely unaffected, but you’ll still need to assess each income stream individually to make sure you’re applying the correct accounting treatment.

When it comes to transition, for revenue recognition, trusts will typically choose between:

• Restating prior-year figures in full, or
• Applying a cumulative adjustment through opening reserves.

Again, this won’t affect your current 2026 reporting, but will need to be considered in your 2026-27 accounts.

Trustees’ annual reports

Narrative reporting is also getting an upgrade. SORP 2026 places greater emphasis on telling a clear, meaningful story about your trust’s impact and resilience.

It is expected that the Academies Accounts Direction will provide further guidance on the specific impact to Academy Trusts, but we can expect potential additional reporting required in the following areas:

• Impact and sustainability

Trusts will need to provide more insight into the impact of their activities, the role of volunteers and sustainability considerations.

• Environmental and cyber risks

Trustees will need to specifically address environmental risks, cyber risks and strategies for mitigating these.

• Reserves and financial sustainability

Trusts will need to provide additional explanations on reserves policies and how reserve levels support long-term sustainability.

• Going concern disclosure

Trustees will need to provide more details to support the conclusion that there are no material uncertainties affecting the trusts ability to continue as a going concern.

These changes may need closer collaboration between finance, governance and operational teams.

Thresholds and reporting tiers

SORP 26 also sees updates to thresholds and reporting tiers. However, for academy trusts, the practical impact may be limited. Trusts are already restricted from using small entity exemptions by the Academies Accounts Direction.

Final reporting requirements for academy trusts will be confirmed when the Academies Accounts Direction 2(AAD) 2026-27 is released.

How Academy Trusts can prepare for SORP 26

Even though the deadline for implementing changes is a way off, early preparation will make a huge difference. Trusts can prepare now by:

• Understanding lease arrangements
• Reviewing income streams
• Strengthening reporting processes, and
• Keeping trustees informed

Handled well, SORP 2026 isn’t just a compliance exercise, it’s an opportunity to strengthen reporting, improve transparency and build confidence in the Trust’s financial story.

If you’d like help understanding what the changes mean for your trust, please contact us or call on:

• Academy specialists Peterborough: 01733 397300
• Academy specialists Corby: 01536 461900
• Academy specialists Northampton: 01604 654254