Finance
Statement of Financial Activities
Formal definition
The Statement of Financial Activities (SOFA) is the primary financial statement for UK charities, recording all incoming resources and their application across various fund types.
What this actually means for you
It replaces the traditional Profit and Loss account used in commercial business, focusing instead on fund movements and charitable expenditure. In practice, this is how statement of financial activities should be applied in your charity.
Example: When reviewing the annual accounts, trustees look at the SOFA to see if the charity had a surplus or deficit in restricted funds, which impacts future delivery capacity. This example shows statement of financial activities in day-to-day use.
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