30 October 2025 
Cheryl Pick, Strategic Projects Manager
The Statement of Recommended Practice (SORP) for Further and Higher Education (FEHE) provides a framework for financial reporting that ensures transparency, consistency, and accountability in how institutions present their financial performance.
The current SORP, based on the 2018 FRS 102 standard, has been in effect since January 2019. Following the Financial Reporting Council’s 2024 updates to UK accounting standards, a new SORP is being developed with an effective from date of January 2026, meaning adoption for the 2026/27 financial year for most Higher Education Providers. More information can be found on BUFDG's SORP Knowledge Hub.
Some of the key changes arising from FRS 102 relate to leases; Most operating leases will now be recognised on the balance sheet as a right-of-use asset and a corresponding lease liability, replacing the previous off-balance sheet treatment, and institutions must now consider the full non-cancellable period when assessing lease terms, including likely extensions or renewals. As a result, those implementing the new SORP requirements will need a complete and up-to-date register of leases, including terms and service components.
To ensure institutions are well-prepared for FEHE SORP 2026, BUFDG and AUDE encourage open dialogue between estates and finance teams to understand the changes, and the organisational impact.
