The Companies (Northern Ireland) Order 1986 (revoked)

[F1 SCHEDULE 8F9 N.I. FORM AND CONTENT OF ACCOUNTS PREPARED BY SMALL COMPANIES]

F1 SR 1997/436

F9 Order repealed (prosp.) by Companies Act 2006 (c. 46), ss. 1284(2), 1295, 1300(2), Sch. 16 and the repeal being partly in force, as to which see individual Articles (with savings (with adaptations) by Companies Act 2006 (Commencement No. 6, Saving and Commencement Nos. 3 and 5 (Amendment)) Order 2008 (S.I. 2008/674), arts. 2(3), {4}, Sch. 2) and subject to amendments (6.4.2008) by Companies Act 2006 (Consequential Amendments etc) Order 2008 (S.I. 2008/948), arts. 2(2), 3(1)(b)(2), Sch. 1 paras. 135, 147, 148 {Sch. 2 Note 1} (with arts. 6, 11, 12) and subject to amendments (6.4.2008) by S.R. 2008/133, {regs. 2, 3}

PART IF9 N.I. GENERAL RULES AND FORMATS

SECTION AF9 N.I. GENERAL RULES

1.—(1) Subject to the following provisions of this Schedule—

(a) every balance sheet of a small company shall show the items listed in either of the balance sheet formats set out in section B; and

(b) every profit and loss account of a small company shall show the items listed in any one of the profit and loss account formats so set out;

in either case in the order and under the headings and sub-headings given in the format adopted.

(2) Sub-paragraph (1) is not to be read as requiring the heading or sub-heading for any item to be distinguished by any letter or number assigned to that item in the format adopted.

2.—(1) Where in accordance with paragraph 1 a small company's balance sheet or profit and loss account for any financial year has been prepared by reference to one of the formats set out in section B, the directors of the company shall adopt the same format in preparing their accounts for subsequent financial years of the company unless in their opinion there are special reasons for a change.

(2) Particulars of any change in the format adopted in preparing a small company's balance sheet or profit and loss account in accordance with paragraph 1 shall be disclosed, and the reasons for the change shall be explained, in a note to the accounts in which the new format is first adopted.

3.—(1) Any item required in accordance with paragraph 1 to be shown in a small company's balance sheet or profit and loss account may be shown in greater detail than required by the format adopted.

(2) A small company's balance sheet or profit and loss account may include an item representing or covering the amount of any asset or liability, income or expenditure not otherwise covered by any of the items listed in the format adopted, but the following shall not be treated as assets in any small company's balance sheet—

(a) preliminary expenses;

(b) expenses of and commission on any issue of shares or debentures; and

(c) costs or research.

(3) In preparing a small company's balance sheet or profit and loss account the directors of the company shall adapt the arrangement and headings and sub-headings otherwise required by paragraph 1 in respect of items to which an Arabic number is assigned in the format adopted, in any case where the special nature of the company's business requires such adaptation.

(4) Items to which Arabic numbers are assigned in any of the formats set out in Section B may be combined in a small company's accounts for any financial year if either—

(a) their individual amounts are not material to assessing the state of affairs or profit or loss of the company for that year; or

(b) the combination facilitates that assessment;

but in a case with head (b) the individual amounts of any items so combined shall be disclosed in a note to the accounts.

(5) Subject to paragraph 4(3), a heading or sub-heading corresponding to an item listed in the format adopted in preparing a small company's balance sheet or profit and loss account shall not be included if there is no amount to be shown for that item in respect of the financial year to which the balance sheet or profit and loss account relates.

(6) Every profit and loss account of a small company shall show the amount of the company's profit or loss on ordinary activities before taxation.

Sub-para. (7) rep. by SR 2004/496

4.—(1) In respect of every item shown in a small company's balance sheet or profit and loss account the corresponding amount for the financial year immediately preceding that to which the balance sheet or profit and loss account relates shall also be shown.

(2) Where that corresponding amount is not comparable with the amount to be shown for the item in question in respect of the financial year to which the balance sheet or profit and loss account relates, the former amount shall be adjusted and particulars of the adjustment and the reasons for it shall be disclosed in a note to the accounts.

(3) Paragraph 3(5) does not apply in any case where an amount can be shown for the item in question in respect of the financial year immediately preceding that to which the balance sheet or profit and loss account relates, and that amount shall be shown under the heading or sub-heading required by paragraph 1 for that item.

5.  Amounts in respect of items representing assets or income may not be set off against amounts in respect of items representing liabilities or expenditure (as the case may be), or vice versa.

5A.  The directors of a company must, in determining how amounts are presented within items in the profit and loss account and balance sheet, have regard to the substance of the reported transaction or arrangement, in accordance with generally accepted accounting principles or practice.

SECTION BF9 N.I. THE REQUIRED FORMATS FOR ACCOUNTS

PreliminaryF9 N.I.

6.  References in this Part to the items listed in any of the formats set out below are to those items read together with any of the notes following the formats which apply to any of those items, and the requirement imposed by paragraph 1 to show the items listed in any such format in the order adopted in the format is subject to any provision in those notes for alternative positions for any particular items.

7.  A number in brackets following any item in any of the formats set out below is a reference to the note of that number in the notes following formats.

8.  In the notes following the formats—

(a) the heading of each note gives the required heading or sub-heading for the item to which it applies and a reference to any letters and numbers assigned to that item in the formats set out below (taking a reference in the case of Format 2 of the balance sheet formats to the item listed under “Assets” or under “Liabilities” as the case may require); and

(b) references to a numbered format are to the balance sheet format or (as the case may require) to the profit and loss account format of that number set out below.

Balance Sheet Formats

Format 1

A.  Called-up share capital not paid (1)

B.  Fixed assets

I Intangible assets

1. Goodwill (2)

2. Other intangible assets (3)

II Tangible assets

1. Land and Buildings

2. Plant and machinery etc.

III Investments

1. Shares in group undertakings and participating interests

2. Loans to group undertakings and undertakings in which the company has a participating interest

3. Other investments other than loans

4. Other investments (4)

C.  Current assets

I Stocks

1. Stocks

2. Payments on account

II Debtors (5)

1. Trade debtors

2. Amounts owed by group undertakings and undertakings in which the company has a participating interest

3. Other debtors

III Investments

1. Shares in group undertakings

2. Other investments

IV Cash at bank and in hand

D.  Prepayments and accrued income (6)

E.  Creditors: amounts falling due within one year

1. Bank loans and overdrafts

2. Trade creditors

3. Amounts owed to group undertakings and undertakings in which the company has a participating interest

4. Other creditors (7)

F.  Net current assets (liabilities) (8)

G.  Total assets less current liabilities

H.  Creditors: amounts falling due after more than one year

1. Bank loans and overdrafts

2. Trade creditors

3. Amounts owed to group undertakings and undertakings in which the company has a participating interest

4. Other creditors (7)

I.   [F2 Provisions for liabilities]

F2 SR 2004/496

J.  Accruals and deferred income (7)

K.  Capital and reserves

I Called up share capital (9)

II Share premium account

III Revaluation reserve

IV Other reserves

V Profit and loss account

Balance Sheet Formats

Format 2

ASSETS

A.  Called up share capital not paid (1)

B.  Fixed assets

I Intangible assets

1. Goodwill (2)

2. Other intangible assets (3)

II Tangible assets

1. Land and buildings

2. Plant and machinery etc.

III Investments

1. Shares in group undertakings and participating interests

2. Loans to group undertakings and undertakings in which the company has a participating interest

3. Other investments other than loans

4. Other investments (4)

C.  Current assets

I Stocks

1. Stocks

2. Payments on account

II Debtors (5)

1. Trade debtors

2. Amounts owed by group undertakings and undertakings in which the company has a participating interest

3. Other debtors

III Investments

1. Shares in group undertakings

2. Other investments

IV Cash at bank and in hand

D.  Prepayments and accrued income (6)

LIABILITIES

A.  Capital and reserves

I Called up share capital (9)

II Share premium account

III Revaluation reserve

IV Other reserves

V Profit and loss account

B.   [F3 Provisions for liabilities]

F3 SR 2004/496

C.  Creditors (10)

1. Bank loans and overdrafts

2. Trade creditors

3. Amounts owed to group undertakings in which the company has a participating interest

4. Other creditors (7)

D.  Accruals and deferred income (7)

Notes on the balance sheet formats

(1)

Called-up share capital not paid

• (Formats 1 and 2, items A and C.II.3.)

• This item may either be shown at item A or included under item C.II.3 in Format 1 or 2.

(2)

Goodwill

• (Formats 1 and 2, item B.I.1.)

• Amounts representing goodwill shall only be included to the extent that the goodwill was acquired for valuable consideration.

(3)

Other intangible assets

• (Formats 1 and 2, item B.I.2.)

• Amounts in respect of concessions, patents, licences, trade marks and similar rights and assets shall only be included in a company's balance sheet under this item if either—

  (a)

  the assets were acquired for valuable consideration and are not required to be shown under goodwill; or

  (b)

  the assets in question were created by the company itself.

(4)

Others: Other investments

• (Formats 1 and 2, items B.III.4 and C.III.2.)

• Where amounts in respect of own shares held are included under either of these items, the nominal value of such shares shall be shown separately.

(5)

Debtors

• (Formats 1 and 2, items C.II.1 to 3.)

• The amount falling due after more than one year shall be shown separately for each item included under debtors unless the aggregate amount of debtors falling due after more than one year is disclosed in the notes to the accounts.

(6)

Prepayments and accrued income

• (Formats 1 and 2, item D.)

• This item may alternatively be included under item C.II.3 in Format 1 or 2.

(7)

Other creditors

• (Format 1, items E.4, H.4 and J and Format 2, items C. 4 and D.)

• There shall be shown separately—

  (a)

  the amount of any convertible loans, and

  (b)

  the amount for creditors in respect of taxation and social security.

• Payments received on account of orders shall be included in so far as they are not shown as deductions from stocks.

• In Format 1, accruals and deferred income may be shown under item J or included under Item E.4 of H.4 or both (as the case may require). In Format 2, accruals and deferred income may be shown under item D or within item C.4 under Liabilities.

(8)

Net current assets (liabilities)

• (Format 1, item F.)

• In determining the amount to be shown under this item any prepayments and accrued income shall be taken into account wherever shown.

(9)

Called up share capital

• (Format 1, item K.I and Format 2, item A.I.)

• The amount of allotted share capital and the amount of called up share capital which has been paid up shall be shown separately.

(10)

Creditors

• (Format 2, items C.1 to 4.)

• Amounts falling due within one year and after one year shall be shown separately for each of these items and for the aggregate of all of these items unless the aggregate amount of creditors falling due within one year and the aggregate amount of creditors falling due after more than one year is disclosed in the notes to the accounts.

Profit and loss account formats

Format 1

(see note (14) below)

1.

Turnover

2.

Cost of sales (11)

3.

Gross profit or loss

4.

Distribution costs (11)

5.

Administrative expenses (11)

6.

Other operating income

7.

Income from shares in group undertakings

8.

Income from participating interests

9.

Income from other fixed asset investments (12)

10.

Other interest receivable and similar income (12)

11.

Amounts written off in investments

12.

Interest payable and similar charges (13)

13.

Tax on profit or loss on ordinary activities

14.

Profit or loss on ordinary activities after taxation

15.

Extraordinary income

15.

Extraordinary charges

16.

Extraordinary profit or loss

18.

Tax on extraordinary profit or loss

19.

Other taxes not shown under the above items

20.

Profit or loss for the financial year.

Profit and loss account formats

Format 2

1.

Turnover

2.

Change in stocks of finished goods and in work in progress

3.

Own work capitalised

4.

Other operating income

(a)

Raw materials and consumables

(b)

other external charges

6.

Staff costs

(a)

wages and salaries

(b)

social security costs

(c)

other pension costs

(a)

Depreciation and other amounts written off tangible and intangible fixed assets

(b)

Exceptional amounts written off current assets

8.

Other operating charges

9.

Income from shares in group undertakings

10.

Income from participating interests

11.

Income from other fixed asset investments (12)

12.

Other interest receivable and similar income (12)

13.

Amounts written off investments

14.

Interest payable and similar charges (13)

15.

Tax on profit or loss on ordinary activities

16.

Profit or loss on ordinary activities after taxation

17.

Extraordinary income

18.

Extraordinary charges

19.

Extraordinary profit or loss

20.

Tax on extraordinary profit or loss

21.

Other taxes not shown under the above items

22.

Profit or loss for the financial year

Profit and loss account formats

Format 3

(see note (14) below)

A  Charges

1. Cost of sales (11)

2. Distribution costs (11)

3. Administrative expenses (11)

4. Amounts written off investments

5. Interest payable and similar charges (13)

6. Tax on profit or loss on ordinary activities

7. Profit or loss on ordinary activities after taxation

8. Extraordinary charges

9. Tax on extraordinary profit or loss

10. Other taxes not shown under the above items

11. Profit or loss for the financial year.

B.  Income

1. Turnover

2. Other operating income

3. Income from shares in group undertakings

4. Income from participating interests

5. Income from other fixed asset investments (12)

6. Other interest receivable and similar income (12)

7. Profit or loss on ordinary activities after taxation

8. Extraordinary income

9. Profit or loss for the financial year

Profit and loss account formats

Format 4

A.  Charges

1. Reduction in stock of finished goods and in work in progress.

2. (a) Raw materials and consumables

(b) Other external charges

3. Staff costs

(a) wages and salaries

(b) social security costs

(c) other pension costs

4. (a) Depreciation and other amounts written off tangible and intangible fixed assets

(b) Exceptional amounts written off current assets

5. Other operating charges

6. Amounts written off investments

7. Interest payable and similar charges (13)

8. Tax on profit or loss on ordinary activities

9. Profit or loss on ordinary activities after taxation

10. Extraordinary charges

11. Tax on extraordinary profit or loss

12. Other taxed not shown under the above items

13. Profit or loss for the financial year.

B.  Income

1. Turnover

2. Increase in stocks of finished goods and in work in progress

3. Own work capitalised

4. Other operating income

5. Income from shares in group undertakings

6. Income from participating interests

7. Income from other fixed asset investments (12)

8. Other interest receivable and similar income (12)

9. Profit or loss on ordinary activities after taxation.

10. Extraordinary income.

11. Profit or loss for the financial year

Notes on the profit and loss account formats

(11)

Cost of sales: distribution costs: administrative expenses

• (Format 1, items 2, 4 and 5 and Format 3, items A.1, 2 and 3.)

• These items shall be stated after taking into account any necessary provisions for depreciation or diminution in value of assets.

(12)

Income from other fixed asset investments: other interest receivable and similar income

• (Format 1, items 9 and 10: Format 2, items 11 and 12: Format 3, items B.5 and 6: Format 4, items B.7 and 8.)

• Income and interest derived from group undertakings shall be shown separately from income and interest derived from other sources.

(13)

Interest payable and similar charges

• (Format 1, item 12: Format 2, item 14: Format 3, item A.5: format 4, item A.7.)

• The amount payable to group undertakings shall be shown separately.

(14)

Formats 1 and 3

The amount of any provisions for depreciation and diminution in value of tangible and intangible fixed assets falling to be shown under items 7(a) and A.4(a) respectively in Formats 2 and 4 shall be disclosed in a note to the accounts in any case where the profit and loss account in prepared by reference to Format 1 or Format 3.

PART IIF9 N.I. ACCOUNTING PRINCIPLES AND RULES

SECTION AF9 N.I. ACCOUNTING PRINCIPLES

PreliminaryF9 N.I.

9.  Subject to paragraph 15, the amounts to be included in respect of all items shown in a small company's accounts shall be determined in accordance with the principles set out in paragraphs 10 to 14.

Accounting principlesF9 N.I.

10.  The company shall be presumed to be carrying on business as a going concern.

11.  Accounting policies shall be applied consistently within the same accounts and from one financial year to the next.

12.  The amount of any item shall be determined on a prudent basis, and in particular—

(a) only profits realised at the balance sheet date shall be included in the profit and loss account; and

(b) all liabilitiesF4 . . . which have arisenF4 . . . in respect of the financial year to which the accounts relate or a previous financial year shall be taken into account, including those which only become apparent between the balance sheet date and the date on which it is signed on behalf of the board of directors in pursuance of Article 241.

F4 SR 2004/496

13.  All income and charges relating to the financial year to which the accounts relate shall be taken into account, without regard to the date of receipt or payment.

14.  In determining the aggregate amount of any item the amount of each individual asset or liability that falls to be taken into account shall be determined separately.

Departure from the accounting principlesF9 N.I.

15.  If it appears to the directors of a small company that there are special reasons for departing from any of the principles stated above in preparing the company's accounts in respect of any financial year they may do so, but particulars of the departure, the reasons for it and its effect shall be given in a note to the accounts.

SECTION BF9 N.I. HISTORICAL COST ACCOUNTING RULES

PreliminaryF9 N.I.

16.   [F5 Subject to sections C and D], the amounts to be included in respect of all items shown in a small company's accounts shall be determined in accordance with the rules set out in paragraphs 17 to 28.

F5 SR 2004/496

Fixed assetsF9 N.I.

General rules N.I.

17.  Subject to any provision of depreciation or diminution in value made in accordance with paragraph 18 or 19 or the amount to be included in respect of any fixed asset shall be its purchase price or production cost.

18.  In the case of any fixed asset which has a limited useful economic life, the amount of—

(a) its purchase price or production cost; or

(b) where it is estimated that any such asset will have a residual value at the end of the period of its useful economic life, its purchase price or production cost less that estimated residual value;

shall be reduced by provisions for depreciation calculated to write off that amount systematically over the period of the asset's useful economic life.

19.—(1) Where a fixed asset investment of a description falling to be included under item B.III of either of the balance sheet formats set out in Part I has diminished in value provisions for diminution in value may be made in respect of it and the amount to be included in respect of it may be reduced accordingly; and any such provisions which are not shown in the profit and loss account shall be disclosed (either separately or in aggregate) in a note to the accounts.

(2) Provisions for diminution in value shall be made in respect of any fixed asset which has diminished in value if the reduction in its value is expected to be permanent (whether its useful economic life is limited or not), and the amount to be included in respect of it shall be reduced accordingly; and any such provisions which are not shown in the profit and loss account shall be disclosed (either separately or in aggregate) in a note to the accounts.

(3) Where the reasons for which any provision was made in accordance with sub-paragraph (1) or (2) have ceased to apply to any extent, that provision shall be written back to the extent that it is no longer necessary; and any amounts written back in accordance with this sub-paragraph which are not shown in the profit and loss account shall be disclosed (either separately or in aggregate) in a note to the accounts.

Rules for determining particular fixed asset items N.I.

20.—(1) Notwithstanding that an item in respect of “development costs” is included under “fixed assets” in the balance sheet formats set out in Part I, an amount may only be included in a small company's balance sheet in respect of development costs in special circumstances.

(2) If any amount is included in a small company's balance sheet in respect of development costs the following information shall be given in a note to the accounts—

(a) the period over which the amount of those costs originally capitalised is being or is to be written off; and

(b) the reasons for capitalising the development costs in question.

21.—(1) The application of paragraphs 17 to 19 in relation to goodwill (if any case where goodwill is treated as an asset) is subject to the following provisions of this paragraph.

(2) Subject to sub-paragraph (3), the amount of the consideration for any goodwill acquired by a small company shall be reduced by provisions for depreciation calculated to write off that amount systematically over a period chosen by the directors of the company.

(3) The period chosen shall not exceed the useful economic life of the goodwill in question.

(4) In any case where any goodwill acquired by a small company is shown or included as an asset in the company's balance sheet the period chosen for writing off the consideration for that goodwill and the reasons for choosing that period shall be disclosed in a note to the accounts.

Current assetsF9 N.I.

22.  Subject to paragraph 23, the amount to be included in respect of any current asset shall be its purchase price or production cost.

23.—(1) If the net realisable value of any current asset is lower than its purchase price or production cost the amount to be included in respect of that asset shall be the net realisable value.

(2) Where the reasons for which any provision for diminution in value was made in accordance with sub-paragraph (1) have ceased to apply to any extent, that provision shall be written back to the extent that it is no longer necessary.

Miscellaneous and supplementary provisionsF9 N.I.

Excess of money owed over value received as an asset item N.I.

24.—(1) Where the amount repayable on any debt owed by a small company is greater than the value of the consideration received in the transaction giving rise to the debt, the amount of the difference may be treated as an asset.

(2) Where any such amount is so treated—

(a) it shall be written off by reasonable amounts each year and must be completely written off before repayment of the debt; and

(b) if the current amount is not shown as a separate item in the company's balance sheet it must be disclosed in a note to the accounts.

Assets included at a fixed amount N.I.

25.—(1) Subject to the following sub-paragraph, assets which fall to be included—

(a) amongst the fixed assets of a small company under the item “tangible assets”; or

(b) amongst the current assets of a small company under the item “raw materials and consumables”;

may be included at a fixed quantity and value.

(2) Sub-paragraph (1) applies to assets of a kind which are constantly being replaced, where—

(a) their overall value is not material to assessing the company's state of affairs; and

(b) their quantity, value and composition are not subject to material variation.

Determination of purchase price or production cost N.I.

26.—(1) The purchase price of an asset shall be determined by adding to the actual price paid any expenses incidental to its acquisition.

(2) The production costs of an asset shall be determined by adding to the purchase price of the raw materials and consumables used the amount of the costs incurred by the company which are directly attributable to the production of that asset.

(3) In addition, there may be included in the production cost of an asset—

(a) a reasonable proportion of the costs incurred by the company which are only indirectly attributable to the production of that asset, but only to the extent that they relate to the period of production; and

(b) interest on capital borrowed to finance the production of that asset, to the extent that it accrues in respect of the period of production;

provided, however, in a case within head (b), that the inclusion of the interest in determining the cost of that asset and the amount of the interest so included is disclosed in a note to the accounts.

(4) In the case of current assets distribution costs may not be included in production costs.

27.—(1) Subject to the qualification mentioned below, the purchase price or production cost of—

(a) any assets which fall to be included under any item shown in a small company's balance sheet under the general item “stocks”; and

(b) any assets which are fungible assets (including investments);

may be determined by the application of any of the methods mentioned in sub-paragraph (2) in relation to any such assets of the same class. The method chosen must be one which appears to the directors to be appropriate in the circumstances of the company.

(2) Those methods are—

(a) the method known as “first in, first out” (FIFO);

(b) the method known as “last in, first out” (LIFO);

(c) a weighted average price; and

(d) any other method similar to any of the methods mentioned above.

(3) For the purposes of this paragraph, assets of any description shall be regarded as fungible if assets of that description are substantially indistinguishable one from another.

Substitution of original stated amount where price or cost unknown N.I.

28.  Where there is no need of the purchase price or production cost of any asset of a small company or of any price, expenses or costs relevant for determining its purchase price or production cost in accordance with paragraph 26, or any such record cannot be obtained without unreasonable expense or delay, its purchase price or production cost shall be taken for the purposes of paragraphs 17 to 23 to be the value ascribed to it in the earliest available record of its value made on or after its acquisition or production by the company.

SECTION CF9 N.I. ALTERNATIVE ACCOUNTING RULES

PreliminaryF9 N.I.

29.—(1) The rules set out in section B are referred to in this Schedule as the historical cost accounting rules.

(2) These rules, with the omission of paragraphs 16, 21 and 25 to 28, are referred to in this Part as the depreciation rules; and references in this Schedule to the historical cost accounting rules do not include the depreciation rules as they apply by virtue of paragraph 32.

30.  Subject to paragraphs 32 to 34, the amounts to be included in respect of assets of any description mentioned in paragraph 31 may be determined on any basis so mentioned.

Alternative accounting rulesF9 N.I.

31.—(1) Intangible fixed assets, other than goodwill, may be included at their current cost.

(2) Tangible fixed assets may be included at a market value determined as at the date of their last valuation or at their current cost.

(3) Investments of any description falling to be included under item B.III of either of the balance sheet formats set out in Part 1 may be included either—

(a) at a market value determined as at the date of their last valuation; or

(b) at a value determined on any basis which appears to the directors to be appropriate in the circumstances of the company;

but in the latter case particulars of the method of valuation adopted and of the reasons for adopting it shall be disclosed in a note to the accounts.

(4) Investments of any description falling to be included under item C.III of either of the balance sheet formats set out in Part 1 may be included at their current cost.

(5) Stocks may be included at their current cost.

Application of the depreciation rulesF9 N.I.

32.  Where the value of any asset of a small company is determined on any basis mentioned in paragraph 31, that value shall be, or (as the case may require) be the starting point for determining, the amount to be included in respect of that asset in the company's accounts, instead of its purchase price or production cost or any value previously so determined for that asset; and the depreciation rules shall apply accordingly in relation to any such asset with the substitution for any reference to its purchase price or production cost of a reference to the value most recently determined for that asset on any basis mentioned in paragraph 31.

(2) The amount of any provision for depreciation required in the case of any fixed asset by paragraph 18 or 19 as it applies by virtue of sub-paragraph (1) is referred to in this paragraph as the adjusted amount, and the amount of any provision which would be required by that paragraph in the case of that asset according to the historical cost accounting rules is referred to as the historical cost amount.

(3) Where sub-paragraph (1) applies in the case of any fixed asset the amount of any provision for depreciation in respect of that asset—

(a) included in any item shown in the profit and loss account in respect of amounts written off assets of the description in question; or

(b) taken into account in stating any item so shown which is required by note (11) of the notes on the profit and loss account formats set out in Part I to be stated after taking into account any necessary provision for depreciation or diminution in value of assets included under it;

may be the historical cost amount instead of the adjusted amount, provided that the amount of any difference between the two is shown separately in the profit and loss account or in a note to the accounts.

Additional information to be provided in case of departure from historical cost accounting rules N.I.

33.—(1) This paragraph applies where the amounts to be included in respect of assets covered by any items shown in a small company's accounts have been determined on any basis mentioned in paragraph 31.

(2) The items affected and the basis of valuation adopted in determining the amounts of the assets in question in the case of each such item shall be disclosed in a note to the accounts.

(3) In the case of each balance sheet item affected (except stocks) either—

(a) the comparable amounts determined according to the historical cost accounting rules; or

(b) the differences between those amounts and the corresponding amounts actually shown in the balance sheet in respect of that item;

shall be shown separately in the balance sheet or in a note to the accounts.

(4) In sub-paragraph (3), references in relation to any item to the comparable amounts determined as there mentioned are references to—

(a) the aggregate amount which would be required to be shown in respect of that item if the amounts to be included in respect of all the assets covered by that item were determined according to this historical cost accounting rules; and

(b) the aggregate amount of the cumulative provisions for depreciation or diminution in value which would be permitted or required in determining those amounts according to those rules.

Revaluation reserveF9 N.I.

34.—(1) With respect to any determination of the value of an asset of a small company on any basis mentioned in paragraph 31, the amount of any profit or loss arising from that determination (after allowing, where appropriate, for any provisions for depreciation or diminution in value made otherwise than by reference to the value so determined and any adjustments of any such provisions made in the light of that determination) shall be credited or (as the case may be) debited to a separate reserve ( “the revaluation reserve”).

(2) The amount of the revaluation reserve shall be shown in the company's balance sheet under a separate sub-heading in the position given for the item “revaluation reserve” in Format 1 or 2 of the balance sheet formats set out in Part I, but need not be shown under that name.

(3) An amount may be transferred—

(a) from the revaluation reserve—

(i) to the profit and loss account, if the amount was previously charged to that account or represents realised profit, or

(ii) on capitalisation,

(b) to or from the revaluation reserve in respect of the taxation relating to any profit or loss credited or debited to the reserve;

and the revaluation reserve shall be reduced to the extent that the amounts transferred to it are no longer necessary for the purposes of the valuation method used.

(4) In sub-paragraph (3)(a)(ii) “capitalisation”, in relation to an amount standing to the credit of the revaluation reserve, means applying it in wholly or partly paying up unissued shares in the company to be allotted to members of the company as fully or partly paid shares.

(5) The revaluation reserve shall not be reduced except as mentioned in this paragraph.

(6) The treatment for taxation purposes of amounts credited or debited to the revaluation reserve shall be disclosed in a note to the accounts.

SECTION DF9 N.I. FAIR VALUE ACCOUNTING

Inclusion of financial instruments at fair valueF9 N.I.

34A.—(1) Subject to sub‐paragraphs (2) to (4), financial instruments (including derivatives) may be included at fair value.

(2) Sub‐paragraph (1) does not apply to financial instruments which constitute liabilities unless—

(a) they are held as part of a trading portfolio, or

(b) they are derivatives.

(3) Sub‐paragraph (1) does not apply to—

(a) financial instruments (other than derivatives) held to maturity;

(b) loans and receivables originated by the company and not held for trading purposes;

(c) interests in subsidiary undertakings, associated undertakings and joint ventures;

(d) equity instruments issued by the company;

(e) contracts for contingent consideration in a business combination;

(f) other financial instruments with such special characteristics that the instruments, according to generally accepted accounting principles or practice, should be accounted for differently from other financial instruments.

(4) If the fair value of a financial instrument cannot be determined reliably in accordance with paragraph 34B, sub‐paragraph (1) does not apply to that financial instrument.

(5) In this paragraph—

• “associated undertaking” has the meaning given by paragraph 20 of Schedule 4A; and

• “joint venture” has the meaning given by paragraph 19 of that Schedule.

Determination of fair valueF9 N.I.

34B.—(1) The fair value of a financial instrument is determined in accordance with this paragraph.

(2) If a reliable market can readily be identified for the financial instrument, its fair value is determined by reference to its market value.

(3) If a reliable market cannot readily be identified for the financial instrument but can be identified for its components or for a similar instrument, its fair value is determined by reference to the market value of its components or of the similar instrument.

(4) If neither sub‐paragraph (2) nor (3) applies, the fair value of the financial instrument is a value resulting from generally accepted valuation models and techniques.

(5) Any valuation models and techniques used for the purposes of sub‐paragraph (4) must ensure a reasonable approximation of the market value.

Inclusion of hedged items at fair valueF9 N.I.

34C.  A company may include any assets and liabilities that qualify as hedged items under a fair value hedge accounting system, or identified portions of such assets or liabilities, at the amount required under that system.

Other assets that may be included at fair valueF9 N.I.

34D.—(1) This paragraph applies to—

(a) investment property, and

(b) living animals and plants,

that, under international accounting standards, may be included in accounts at fair value.

(2) Such investment property and such living animals and plants may be included at fair value, provided that all such investment property or, as the case may be, all such living animals and plants are so included where their fair value can reliably be determined.

(3) In this paragraph, “fair value” means fair value determined in accordance with relevant international accounting standards.

Accounting for changes in valueF9 N.I.

34E.—(1) This paragraph applies where a financial instrument is valued in accordance with paragraph 34A or 34C or an asset is valued in accordance with paragraph 34D.

(2) Notwithstanding paragraph 12, and subject to sub‐paragraphs (3) and (4), a change in the value of the financial instrument or of the investment property or living animal or plant must be included in the profit and loss account.

(3) Where—

(a) the financial instrument accounted for is a hedging instrument under a hedge accounting system that allows some or all of the change in value not to be shown in the profit and loss account, or

(b) the change in value relates to an exchange difference arising on a monetary item that forms part of a company's net investment in a foreign entity,

the amount of the change in value must be credited to or (as the case may be) debited from a separate reserve ( “the fair value reserve”).

(4) Where the instrument accounted for—

(a) is an available for sale financial asset, and

(b) is not a derivative,

the change in value may be credited to or (as the case may be) debited from the fair value reserve.

The fair value reserveF9 N.I.

34F.—(1) The fair value reserve must be adjusted to the extent that the amounts shown in it are no longer necessary for the purposes of paragraph 34E(3) or (4).

(2) The treatment for taxation purposes of amounts credited to or debited from the fair value reserve must be disclosed in a note to the accounts.

PART IIIF9 N.I. NOTES TO THE ACCOUNTS

PreliminaryF9 N.I.

35.  Any information required in the case of any small company by the following provisions of this Part shall (if not given in the company's accounts) be given by way of a note to those accounts.

Reserves and dividendsF9 N.I.

35A.  There must be stated—

(a) any amount set aside or proposed to be set aside to, or withdrawn or proposed to be withdrawn from, reserves,

(b) the aggregate amount of dividends paid in the financial year (other than those for which a liability existed at the immediately preceding balance sheet date),

(c) the aggregate amount of dividends that the company is liable to pay at the balance sheet date, and

(d) the aggregate amount of dividends that are proposed before the date of approval of the accounts, and not otherwise disclosed under sub‐paragraph (b) or (c).

Disclosure of account policiesF9 N.I.

36.  The accounting policies adopted by the company in determining the amounts to be included in respect of items shown in the balance sheet and in determining the profit or loss of the company shall be stated (including such policies with respect to the depreciation and diminution in value of assets).

Information supplementing the balance sheetF9 N.I.

37.  Paragraphs 38 to 47 require information which either supplements the information given with respect to any particular items shown in the balance sheet or is otherwise relevant to assessing the company's state of affairs in the light of the information so given.

Share capital and debentures N.I.

38.—(1) The following information shall be given with respect to the company's share capital—

(a) the authorised share capital; and

(b) where shares of more than one class have been allotted, the number and aggregate nominal value of shares of each class allotted.

(2) In the case of any part of the allotted share capital that consists of redeemable shares, the following information shall be given—

(a) the earliest and latest dates on which the company has power to redeem those shares;

(b) whether those shares must be redeemed in any event or are liable to be redeemed at the option of the company or of the shareholder; and

(c) whether any (and, if so, what) premium is payable on redemption.

39.  If the company has allotted any shares during the financial year, the following information shall be given—

(a) the classes of shares allotted; and

(b) as respects each class of shares, the number allotted, their aggregate nominal value, and the consideration received by the company for the allotment.

Fixed assets N.I.

40.—(1) In respect of each item which is or would but for paragraph 3(4)(b) be shown under the general item “fixed assets” in the company's balance sheet the following information shall be given—

(a) the appropriate amounts in respect of that item as at the date of the beginning of the financial year and as at the balance sheet date respectively;

(b) the effect on any amount shown in the balance sheet in respect of that item of—

(i) any revision of the amount in respect of any assets included under that item made during that year on any basis mentioned in paragraph 31;

(ii) acquisitions during that year of any assets;

(iii) disposals during that year of any assets; and

(iv) any transfers of assets of the company to and from that item during that year.

(2) The reference in sub-paragraph (1)(a) to the appropriate amounts in respect of any item as at any date there mentioned is a reference to amounts representing the aggregate amounts determined, as at that date, in respect of assets falling to be included under that item on either of the following basis, that is to say—

(a) on the basis of purchase price or production cost (determined in accordance with paragraphs 26 and 27); or

(b) on any basis mentioned in paragraph 31,

(leaving out of account in either case any provisions for depreciation or diminution in value).

(3) In respect of each item within sub-paragraph (1)—

(a) the cumulative amount of provisions for depreciation or diminution in value of assets included under that item as at each date mentioned in sub-paragraph (1)(a);

(b) the amount of any such provisions made in respect of the financial year;

(c) the amount of any adjustments made in respect of any such provisions during that year in consequence of the disposal of any assets; and

(d) the amount of any other adjustments made in respect of any such provisions during that year;

shall also be stated.

41.  Where any fixed assets of the company (other than listed investments) are included under any item shown in the company's balance sheet at an amount determined on any basis mentioned in paragraph 31, the following information shall be given—

(a) the years (so far as they are known to the directors) in which the assets were severally valued and the several values; and

(b) in the case of assets that have been valued during the financial year, the names of the persons who valued them or particulars of their qualifications for doing so and (whichever is stated) the basis of valuation used by them.

Investments N.I.

42.—(1) In respect of the amount of each item which is or would but for paragraph 3(4)(b) be shown in the company's balance sheet under the general item "investments" (whether as fixed assets or as current assets) there shall be stated how much of that amount is ascribable to listed investments.

(2) Where the amount of any listed investments is stated for any item in accordance with sub-paragraph (1), the following amounts shall also be stated—

(a) the aggregate market value of those investments where it differs from the amount so stated; and

(b) both the market value and the stock exchange value of any investments of which the former value is, for the purpose of the accounts, taken as being higher than the latter.

Information about fair value of assets and liabilities N.I.

42A.—(1) This paragraph applies where financial instruments have been valued in accordance with paragraph 34A or 34C.

(2) There must be stated—

(a) where the fair value of the instruments has been determined in accordance with paragraph 34B(4), the significant assumptions underlying the valuation models and techniques used,

(b) for each category of financial instrument, the fair value of the instruments in that category and the changes in value—

(i) included in the profit and loss account, and

(ii) credited to or (as the case may be) debited from the fair value reserve,

in respect of those instruments, and

(c) for each class of derivatives, the extent and nature of the instruments, including significant terms and conditions that may affect the amount, timing and certainty of future cash flows.

(3) Where any amount is transferred to or from the fair value reserve during the financial year, there must be stated in tabular form—

(a) the amount of the reserve as at the date of the beginning of the financial year and as at the balance sheet date respectively;

(b) the amount transferred to or from the reserve during that year; and

(c) the source and application respectively of the amounts so transferred.

42B.—(1) Sub‐paragraph (2) applies if—

(a) the company has financial fixed assets that could be included at fair value by virtue of paragraph 34A,

(b) the amount at which those assets are included under any item in the company's accounts is in excess of their fair value, and

(c) the company has not made provision for diminution in value of those assets in accordance with paragraph 19(1).

(2) There must be stated—

(a) the amount at which either the individual assets or appropriate groupings of those individual assets are included in the company's accounts,

(b) the fair value of those assets or groupings, and

(c) the reasons for not making a provision for diminution in value of those assets, including the nature of the evidence that provides the basis for the belief that the amount at which they are stated in the accounts will be recovered.

Information where investment property and living animals and plants included at fair value N.I.

42C.—(1) This paragraph applies where the amounts to be included in a company's accounts in respect of investment property or living animals and plants have been determined in accordance with paragraph 34D.

(2) The balance sheet items affected and the basis of valuation adopted in determining the amounts of the assets in question in the case of each such item must be disclosed in a note to the accounts.

(3) In the case of investment property, for each balance sheet item affected there must be shown, either separately in the balance sheet or in a note to the accounts—

(a) the comparable amounts determined according to the historical cost accounting rules; or

(b) the differences between those amounts and the corresponding amounts actually shown in the balance sheet in respect of that item.

(4) In sub‐paragraph (3), references in relation to any item to the comparable amounts determined in accordance with that sub‐paragraph are references to—

(a) the aggregate amount which would be required to be shown in respect of that item if the amounts to be included in respect of all the assets covered by that item were determined according to the historical cost accounting rules; and

(b) the aggregate amount of the cumulative provisions for depreciation or diminution in value which would be permitted or required in determining those amounts according to those rules.

Reserves and provisions N.I.

43.—(1) Where any amount is transferred—

(a) to or from any reserves; or

(b) to any[F6 provisions for liabilities]; or

(c) from any[F6 provision for liabilities] otherwise than for the purpose for which the provision was established;

and the reserves or provisions are or would but for paragraph 3(4)(b) be shown as separate items in the company's balance sheet, the information mentioned in sub-paragraph (2) shall be given in respect of the aggregate of reserves or provisions included in the same item.

(2) That information is—

(a) the amount of the reserves or provisions as at the date of the beginning of the financial year and as at the balance sheet date respectively;

(b) any amounts transferred to or from the reserves or provisions during that year; and

(c) the source and application respectively of any amounts so transferred.

(3) Particulars shall be given of each provision included in the item “other provisions” in the company's balance sheet in any case where the amount of that provision is material.

F6 SR 2004/496

Details of indebtedness N.I.

44.—(1) For the aggregate of all items shown under “creditors” in the company's balance sheet there shall be stated the aggregate of the following amounts, that is to say—

(a) the amount of any debts included under “creditors” which are payable or repayable otherwise than by instalments and fall due for payment or repayment after the end of the period of five years beginning with the day next following the end of the financial year; and

(b) in the case of any debts so included which are payable or repayable by instalments, the amount of any instalments which fall due for payment after the end of that period.

(2) In respect of each item shown under “creditors” in the company's balance sheet there shall be stated the aggregate amount of any debts included under that item in respect of which any security has been given by the company.

(3) References above in this paragraph to an item shown under “creditors” in the company's balance sheet include references, where amounts falling due to creditors within one year and after more than one year are distinguished in the balance sheet—

(a) in a case within sub-paragraph (1), to an item shown under the latter of those categories; and

(b) in a case within sub-paragraph (2), to an item shown under either of those categories;

and references to items shown under “creditors” include references to items which would but for paragraph 3(4)(b) be shown under that heading.

45.  If any fixed cumulative dividends on the company's shares are in arrear, there shall be stated—

(a) the amount of the arrears; and

(b) the period for which the dividends or, if there is more than one class, each class of them are in arrear.

Guarantees and other financial commitments N.I.

46.—(1) Particulars shall be given of any charge on the assets of the company to secure the liabilities of any other person, including, where practicable, the amount secured.

(2) The following information shall be given with respect to any other contingent liability not provided for—

(a) the amount or estimated amount of that liability;

(b) its legal nature; and

(c) whether any valuable security has been provided by the company in connection with that liability and if so, what.

(3) There shall be stated, where practicable, the aggregate amount or estimated amount of contracts for capital expenditure, so far as not provided for.

(4) Particulars shall be given of—

(a) any pension commitments included under any provision shown in the company's balance sheet; and

(b) any such commitments for which no provision has been made;

and where any such commitment relates wholly or partly to pensions payable to past directors of the company separate particulars shall be given of that commitment so far as it relates to such pensions.

(5) Particulars shall also be given of any other financial commitments which—

(a) have not been provided for; and

(b) are relevant to assessing the company's state of affairs.

(6) Commitments within any of sub-paragraphs (1) to (5) which are undertaken on behalf of or for the benefit of—

(a) any parent undertaking or fellow subsidiary undertaking, or

(b) any subsidiary undertaking of the company,

shall be stated separately from the other commitments within that sub-paragraph, and commitments within head (a) shall also be stated separately from those within head (b).

Miscellaneous matters N.I.

47.  Particulars shall be given of any case where the purchase price or production cost of any asset is for the first time determined under paragraph 28.

Information supplementing the profit and loss accountF9 N.I.

48.  Paragraphs 49 and 50 require information which either supplements the information given with respect to any particular items shown in the profit and loss account or otherwise provides particulars of income or expenditure of the company or of circumstances affecting the items shown in the profit and loss account.

Particulars of turnover N.I.

49.—(1) If the company has supplied geographical markets outside the United Kingdom during the financial year in question, there shall be stated the percentage of its turnover that, in the opinion of the directors, is attributable to those markets.

(2) In analysing for the purposes of this paragraph the source of turnover, the directors of the company shall have regard to the manner in which the company's activities are organised.

Miscellaneous matters N.I.

50.—(1) Where any amount relating to any preceding financial year is included in any item in the profit and loss account, the effect shall be stated.

(2) Particulars shall be given of any extraordinary income or charges arising in the financial year.

(3) The effect shall be stated of any transactions that are exceptional by virtue of size or incidence though they fall within the ordinary activities of the company.

GeneralF9 N.I.

51.—(1) Where sums originally denominated in foreign currencies have been brought into account under any items shown in the balance sheet or profit and loss account, the basis on which those sums have been translated into sterling shall be stated.

(2) Subject to sub-paragraph (3), in respect of every item stated in a note to the accounts the corresponding amount for the financial year immediately preceding that to which the accounts relate shall also be stated and where the corresponding amount is not comparable, it shall be adjusted and particulars of the adjustment and the reasons for it shall be given.

(3) Sub-paragraph (2) does not apply in relation to any amounts stated by virtue of any of the following provisions of this Order—

(a) paragraph 13 of Schedule 4A (details of accounting treatment of acquisitions),

(b) paragraphs 2, 8(3), 16, 21(1)(d), 22(4) and (5), 24(3) and (4) and 27(3) and (4) of Schedule 5 (shareholdings in other undertakings),

(c) Parts II and III of Schedule 6 (loans and other dealings in favour of directors and others), and

(d) paragraphs 40 and 43 (fixed assets and reserves and provisions).

Dormant companies acting as agents N.I.

51A.  Where the directors of a company take advantage of the exemption conferred by Article 257AA, and the company has during the financial year in question acted as an agent for any person, the fact that it has so acted must be stated.

PART IVF9 N.I. INTERPRETATION OF SCHEDULE

52.  The following paragraphs apply for the purposes of this Schedule and its interpretation.

Financial instruments N.I.

52A.  References to “derivatives” include commodity‐based contracts that give either contracting party the right to settle in cash or in some other financial instrument, except when such contracts—

(a) were entered into for the purpose of, and continue to meet, the company's expected purchase, sale or usage requirements,

(b) were designed for such purpose at their inception, and

(c) are expected to be settled by delivery of the commodity.

52B.—(1) The expressions listed in sub‐paragraph (2) have the same meaning as they have in Council Directive 78/660/EEC on the annual accounts of certain types of companies, as amended.

(2) Those expressions are “available for sale financial asset”, “business combination”, “commodity‐based contracts”, “derivative”, “equity instrument”, “exchange difference”, “fair value hedge accounting system”, “financial fixed asset”, “financial instrument”, “foreign entity”, “hedge accounting”, “hedge accounting system”, “hedged items”, “hedging instrument”, “held for trading purposes”, “held to maturity”, “monetary item”, “receivables”, “reliable market” and “trading portfolio”.

Historical cost accounting rules N.I.

53.  References to the historical cost accounting rules shall be read in accordance with paragraph 29.

Investment property N.I.

53A.  “Investment property” means land held to earn rent or for capital appreciation.

Listed investments N.I.

[F7 54.]— [F7 (1) “Listed investment” means an investment as respects which there has been granted a listing on—

(a) a recognised investment exchange other than an overseas investment exchange; or

(b) a stock exchange of repute outside Northern Ireland.

(2) “Recognised investment exchange” and “overseas investment exchange” have the meaning given in Part 18 of the Financial Services and Markets Act 2000.]

F7 SI 2001/3649

Loans N.I.

55.  A loan is treated as falling due for repayment, and an instalment of a loan is treated as falling due for payment, on the earliest date on which the lender could require repayment or (as the case may be) payment, if he exercised all options and rights available to him.

Materiality N.I.

56.  Amounts which in the particular context of any provision of this Schedule are not material may be disregarded for the purposes of that provision.

Provisions N.I.

57.—(1) References to provisions for depreciation or diminution in value of assets are to any amount written off by way of providing for depreciation or diminution in value of assets.

(2) Any reference in the profit and loss account formats set out in Part 1 to the depreciation of, or amounts written off, assets of any description is to any provision for depreciation or diminution in value of assets of that description.

58.  References to [F8 provisions for liabilities] are to any amount retained as reasonably necessary for the purpose of providing for any liability[F8 the nature of which is clearly defined and] which is either likely to be incurred, or certain to be incurred but uncertain as to amount or as to the date on which it will arise.

F8 SR 2004/496

Staff costs N.I.

59.—(1) “Social security costs” means any contributions by the company to any state social security or pension scheme, fund or arrangement.

(2) “Pension costs” includes any costs incurred by the company in respect of any pension scheme established for the purpose of providing pensions for persons currently of formerly employed by the company, any sums set aside for the future payment or pensions directly by the company to current or former employees and any pensions paid directly to such persons without having first been set aside.

(3) Any amount stated in respect of the item “social security costs” or in respect of the item “wages and salaries” in the company's profit and loss account shall be determined by reference to payments made or costs incurred in respect of all persons employed by the company during the financial year under contracts of service.