The Companies, Partnerships and Groups (Accounts and Reports) Regulations 2015

Amendment of Part 1 (form and content of Companies Act group accounts) of Schedule 6 (group accounts) to the Small Companies Accounts Regulations U.K.

22.—(1) Part 1 of Schedule 6 to the Small Companies Accounts Regulations is amended as follows.

(2) In paragraph 1(1), for the words “sub-paragraphs (1) and (2)”, substitute “ the following provisions of this Schedule ”.

(3) After paragraph 1(1), insert—

“(1A) Paragraph 1A of Schedule 1 to these Regulations does not apply to group accounts.”.

(4) In paragraph 1(3)—

(a) at the end of sub-paragraph (a), insert the word “ and ”, and

(b) omit sub-paragraphs (c) and (d).

(5) After paragraph 2(1), insert—

“(1A) Group accounts must be drawn up as at the same date as the accounts of the parent company.”

(6) After paragraph 9(5) insert—

“(6) Negative goodwill may be transferred to the consolidated profit and loss account where such a treatment is in accordance with the principles and rules of Part 2 of Schedule 1 to these Regulations.”

(7) For paragraph 10, substitute—

“10.   The conditions for accounting for an acquisition as a merger are—

(a) that the undertaking whose shares are acquired is ultimately controlled by the same party both before and after the acquisition,

(b) that the control referred to in paragraph (a) is not transitory, and

(c) that adoption of the merger method accords with generally accepted accounting principles or practice.”

(8) After paragraph 16, insert—

“16A.   Where an acquisition has taken place in the financial year and the merger method of accounting has been adopted, the notes to the accounts must also disclose—

(a) the address of the registered office of the undertaking acquired (whether in or outside the United Kingdom),

(b) the name of the party referred to in paragraph 10(a),

(c) the address of the registered office of that party (whether in or outside the United Kingdom), and

(d) the information referred to in paragraph 11(6).”

(9) For paragraph 17, substitute—

“Non-controlling interests

17.— (1) The formats set out in Section B of Part 1 of Schedule 1 to these Regulations have effect in relation to group accounts with the following additions.

(2) In the Balance Sheet Formats there must be shown, as a separate item and under the heading “non-controlling interests”, the amount of capital and reserves attributable to shares in subsidiary undertakings included in the consolidation held by or on behalf of persons other than the parent company and its subsidiary undertakings.

(3) In the Profit and Loss Account Formats there must be shown, as a separate item and under the heading “non-controlling interests”, the amount of any profit or loss attributable to shares in subsidiary undertakings included in the consolidation held by or on behalf of persons other than the parent company and its subsidiary undertakings.

(4) For the purposes of paragraph (4) of Schedule 1 (power to adapt or combine items)—

(a) the additional item required by sub-paragraph (2) above is treated as one to which a letter is assigned, and

(b) the additional item required by sub-paragraph (3) above is treated as one to which an Arabic number is assigned.”.

(10) In paragraph 18(2), insert the words “ and sections 402 and 405 of the 2006 Act ” after “consolidated accounts”.

(11) After paragraph 18(2), insert—

“(3) In addition to the disclosure of the average number of employees employed during the financial year (see section 411(7) of the 2006 Act), there must be a separate disclosure in the notes to the accounts of the average number of employees employed by undertakings that are proportionately consolidated.”.

(12) After paragraph 20, insert—

“Deferred tax balances

20A.   Deferred tax balances must be recognised on consolidation where it is probable that a charge to tax will arise within the foreseeable future for one of the undertakings included in the consolidation.

Related Party Transactions

20B.   Paragraph 66 of Schedule 1 to these Regulations applies to transactions which the parent company, or other undertakings included in the consolidation, have entered into with related parties, unless they are intra-group transactions.”.