I have recently taken on the accounting work for a very small charity on a voluntary basis. The charity was set up many years ago with a bequest and now consists of a number of investments in quoted companies. Annual income is in the region of £1,500 and this is used to make grants for educational purposes. No attempt is made to increase the income by asking for public donations for example.
Historically the accounts produced have been a simple I&E account and the balance sheet which is more or less investments at cost, cash at bank on the asset side, representing capital. The charity is beneath the threshold for registration with the Charities Commission (though it does have an HMRC reference) but reading all the guidance it appears that if it is to produce accruals accounts these need to follow the charities SoRP and FRS 102. This will entail a trustees report being prepared and more disclosures in the accounts. Also the investments would need to be held at market value with any movements from one year to the next reflected in the statement of financial affairs. As the only readers of the accounts are the trustees and possibly the educational establishment connected to the grants, this seems way over the top and excessive.
There is an alternative, which is to prepare accounts on a cash basis, which might be the only option even though the trustees understand accruals accounting and ideally would prefer to continue with the existing practice.
Can anyone with experience of charities please confirm my understanding (or let me know of that is incorrect) or identify any way round this.