- Latest available (Revised)
- Point in Time (12/11/2004)
- Original (As enacted)
Version Superseded: 06/04/2008
Point in time view as at 12/11/2004.
Companies Act 1985, Cross Heading: FAIR VALUE ACCOUNTING is up to date with all changes known to be in force on or before 23 August 2024. There are changes that may be brought into force at a future date. Changes that have been made appear in the content and are referenced with annotations.
Changes and effects yet to be applied by the editorial team are only applicable when viewing the latest version or prospective version of legislation. They are therefore not accessible when viewing legislation as at a specific point in time. To view the ‘Changes to Legislation’ information for this provision return to the latest version view using the options provided in the ‘What Version’ box above.
44A(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 44B, 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.
44B(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.
44CA 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.
44D(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.
44E(1)This paragraph applies where a financial instrument is valued in accordance with paragraph 44A or 44C or an asset is valued in accordance with paragraph 44D.
(2)Notwithstanding paragraph 19 of this Schedule, and subject to sub-paragraphs (3) and (4) below, 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.
44F(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 44E(3) or (4).
(2)The treatment for taxation purposes of amounts credited or debited to the fair value reserve shall be disclosed in a note to the accounts.
The Whole Act you have selected contains over 200 provisions and might take some time to download. You may also experience some issues with your browser, such as an alert box that a script is taking a long time to run.
Would you like to continue?
The Whole Act you have selected contains over 200 provisions and might take some time to download.
Would you like to continue?
The Whole Act you have selected contains over 200 provisions and might take some time to download. You may also experience some issues with your browser, such as an alert box that a script is taking a long time to run.
Would you like to continue?
The Whole Act without Schedules you have selected contains over 200 provisions and might take some time to download. You may also experience some issues with your browser, such as an alert box that a script is taking a long time to run.
Would you like to continue?
The Schedules you have selected contains over 200 provisions and might take some time to download. You may also experience some issues with your browser, such as an alert box that a script is taking a long time to run.
Would you like to continue?
Latest Available (revised):The latest available updated version of the legislation incorporating changes made by subsequent legislation and applied by our editorial team. Changes we have not yet applied to the text, can be found in the ‘Changes to Legislation’ area.
Original (As Enacted or Made): The original version of the legislation as it stood when it was enacted or made. No changes have been applied to the text.
Point in Time: This becomes available after navigating to view revised legislation as it stood at a certain point in time via Advanced Features > Show Timeline of Changes or via a point in time advanced search.
Geographical Extent: Indicates the geographical area that this provision applies to. For further information see ‘Frequently Asked Questions’.
Show Timeline of Changes: See how this legislation has or could change over time. Turning this feature on will show extra navigation options to go to these specific points in time. Return to the latest available version by using the controls above in the What Version box.
Access essential accompanying documents and information for this legislation item from this tab. Dependent on the legislation item being viewed this may include:
This timeline shows the different points in time where a change occurred. The dates will coincide with the earliest date on which the change (e.g an insertion, a repeal or a substitution) that was applied came into force. The first date in the timeline will usually be the earliest date when the provision came into force. In some cases the first date is 01/02/1991 (or for Northern Ireland legislation 01/01/2006). This date is our basedate. No versions before this date are available. For further information see the Editorial Practice Guide and Glossary under Help.
Use this menu to access essential accompanying documents and information for this legislation item. Dependent on the legislation item being viewed this may include:
Click 'View More' or select 'More Resources' tab for additional information including: