The Friendly Societies (Accounts and Related Provisions) (Amendment) Regulations 2005

Information about fair value in notes to the accounts

3.  After paragraph 32 of Schedule 5 (notes to the annual accounts), insert—

“Information about fair value of assets and liabilities

33.— (1) This paragraph applies where financial instruments have been valued in accordance with paragraph 24A or 24C of Schedule 6.

(2) There shall be stated in the notes to the accounts –

(a) the significant assumptions underlying the valuation models and techniques used where the fair value of the instruments has been determined in accordance with paragraph 24B(4) of that Schedule;

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

(i) included in the income and expenditure account, and

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

in respect of instruments in that category; and

(c) for each class of derivative financial instruments, 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 shall 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.

(4) Where investments are shown at their purchase price, their fair value shall be disclosed in the notes on the accounts.

(5) Where investments are shown at their fair value, their purchase price shall be disclosed in the notes to the accounts.

(6) The valuation method applied to each investment item shall be stated in the notes to the accounts, together with the amounts so determined.

Information where investment property or living animals and plants included at fair value

34.— (1) This paragraph applies where the amounts to be included in a society’s accounts in respect of investment property or living animals and plants have been determined in accordance with paragraph 24D.

(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 shall be disclosed in a note to the accounts.

(3) In the case of investment property, for each balance sheet item affected there shall 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) above, 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.”.