The Companies, Partnerships and Groups (Accounts and Reports) (No. 2) Regulations 2015

EXPLANATORY NOTE

(This note is not part of the Regulations)

These Regulations amend the law relating to the preparation of the annual accounts of companies. They extend to the whole of the United Kingdom.

Regulations 3 and 4 implement the final words of Article 12(6)(d) of Directive 2013/34/EU of the European Parliament and of the Council of 26th June 2013 on the annual financial statements, consolidated financial statements and related reports of certain types of undertakings, amending Directive 2006/43/EC of the European Parliament and of the Council and repealing Council Directives 78/660/EEC and 83/349/EEC (OJ No L 182, 29.6.13, p.19). The Companies, Partnerships and Groups (Accounts and Reports) Regulations 2015 (S.I. 2015/980) (“the 2015 Regulations”) implemented obligations in Chapters 1 to 9 of that Directive. The 2015 Regulations changed UK law to the extent that amendments were required by those Chapters, with the exception of the amendments required by the final words of Article 12(6)(d) of the Directive.

Regulation 3 amends Schedule 1 to the Small Companies and Groups (Accounts and Directors’ Report) Regulations 2008 (S.I. 2008/409), and regulation 4 amends Schedules 1, 2 and 3 to the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 (S.I. 2008/410). The effect of these amendments is that, where provision for diminution in value has been made in respect of goodwill and the reasons for which that provision was made have ceased to apply to any extent, the provision must not be written back to any extent.

The amendments made by regulations 3 and 4 apply in respect of financial years beginning on or after 1st January 2016, but a company which has chosen to apply the amendments made by the 2015 Regulations to its financial year beginning on or after 1st January 2015 (but before 1st January 2016) must also apply the amendments made by regulations 3 or 4 (as the case may be) to that financial year (regulation 2(2)). The amendments made by regulations 3 and 4 do not apply in relation to limited liability partnerships (regulation 2(3)).

Regulation 5 makes consequential and minor amendments to regulations 2 and 3 of the 2015 Regulations.

A transposition note for Chapters 1 to 9 of Directive 2013/34/EU is annexed to the Explanatory Memorandum which is available alongside this instrument on www.legislation.gov.uk. A full regulatory impact assessment of the effect that the 2015 Regulations and this instrument will have on the costs of business and the voluntary sector is available from the Business Environment Directorate, Department for Business, Innovation and Skills, 1 Victoria Street, London SW1H OET or at www.gov.uk/bis and is annexed to the Explanatory Memorandum which is available alongside this instrument on www.legislation.gov.uk.