Modifications etc. (not altering text)
C1Sch. 9A applied in part (with modifications) (31.12.2004) by The Insurance Accounts Directive (Lloyd's Syndicate and Aggregate Accounts) Regulations 2004 (S.I. 2004/3219), reg. 3(4)(d), Sch.
Sch. 9A applied in part (31.12.2004) by The Insurance Accounts Directive (Lloyd's Syndicate and Aggregate Accounts) Regulations 2004 (S.I. 2004/3219), reg. 8(4)(5)
20Subject to paragraphs 27 to 29 below—
(a)the amounts to be included in respect of assets of any description mentioned in paragraph 22 below shall be determined in accordance with that paragraph; and
(b)subject to paragraph 21 below, the amounts to be included in respect of assets of any description mentioned in paragraph 23 below may be determined in accordance with that paragraph or the rules set out in paragraphs 30 to 41 below (“the historical cost accounting rules”).
F121
Textual Amendments
F1Sch. 9A Pt. I para. 21 repealed (2.2.1996) by S.I. 1996/189, reg. 14(7), Sch. 5 paras. 1, 4 (with reg. 16)
22(1)Subject to paragraph 24 below, investments falling to be included under Assets item C (investments) shall be included at their current value calculated in accordance with paragraphs 25 and 26 below.
(2)Investments falling to be included under Assets item D (assets held to cover linked liabilities) shall be shown at their current value calculated in accordance with paragraphs 25 and 26 below.
23(1)Intangible assets other than goodwill may be shown at their current cost.
(2)Assets falling to be included under Assets items F.I (tangible assets) and F.IV (own shares) in the balance sheet format may be shown at their current value calculated in accordance with paragraphs 25 and 26 below or at their current cost.
(3)Assets falling to be included under Assets item F.II (stocks) may be shown at current cost.
24(1)This paragraph applies to debt securities and other fixed-income securities shown as assets under Assets items C.II (investments in group undertakings and participating interests) and C.III (other financial investments).
(2)Securities to which this paragraph applies may either be valued in accordance with paragraph 22 above or their amortised value may be shown in the balance sheet, in which case the provisions of this paragraph apply.
(3)Subject to sub-paragraph (4) below, where the purchase price of securities to which this paragraph applies exceeds the amount repayable at maturity, the amount of the difference —
(a)shall be charged to the profit and loss account, and
(b)shall be shown separately in the balance sheet or in the notes to the accounts.
(4)The amount of the difference referred to in sub-paragraph (3) above may be written off in instalments so that it is completely written off when the securities are repaid, in which case there shall be shown separately in the balance sheet or in the notes to the accounts the difference between the purchase price (less the aggregate amount written off) and the amount repayable at maturity.
(5)Where the purchase price of securities to which this paragraph applies is less than the amount repayable at maturity, the amount of the difference shall be released to income in instalments over the period remaining until repayment, in which case there shall be shown separately in the balance sheet or in the notes to the accounts the difference between the purchase price (plus the aggregate amount released to income) and the amount repayable at maturity.
(6)Both the purchase price and the current value of securities valued in accordance with this paragraph shall be disclosed in the notes to the accounts.
(7)Where securities to which this paragraph applies which are not valued in accordance with paragraph 22 above are sold before maturity, and the proceeds are used to purchase other securities to which this paragraph applies, the difference between the proceeds of sale and their book value may be spread uniformly over the period remaining until the maturity of the original investment.
25(1)Subject to sub-paragraph (5) below, in the case of investments other than land and buildings, current value shall mean market value determined in accordance with this paragraph.
(2)In the case of listed investments, market value shall mean the value on the balance sheet date or, when the balance sheet date is not a stock exchange trading day, on the last stock exchange trading day before that date.
(3)Where a market exists for unlisted investments, market value shall mean the average price at which such investments were traded on the balance sheet date or, when the balance sheet date is not a trading day, on the last trading day before that date.
(4)Where, on the date on which the accounts are drawn up, listed or unlisted investments have been sold or are to be sold within the short term, the market value shall be reduced by the actual or estimated realisation costs.
(5)Except where the equity method of accounting is applied, all investments other than those referred to in sub-paragraphs (2) and (3) above shall be valued on a basis which has prudent regard to the likely realisable value.
26(1)In the case of land and buildings, current value shall mean the market value on the date of valuation, where relevant reduced as provided in sub-paragraphs (4) and (5) below.
(2)Market value shall mean the price at which land and buildings could be sold under private contract between a willing seller and an arm’s length buyer on the date of valuation, it being assumed that the property is publicly exposed to the market, that market conditions permit orderly disposal and that a normal period, having regard to the nature of the property, is available for the negotiation of the sale.
(3)The market value shall be determined through the separate valuation of each land and buildings item, carried out at least every five years in accordance with generally recognised methods of valuation.
(4)Where the value of any land and buildings item has diminished since the preceding valuation under sub-paragraph (3), an appropriate value adjustment shall be made.
(5)The lower value arrived at under sub-paragraph (4) shall not be increased in subsequent balance sheets unless such increase results from a new determination of market value arrived at in accordance with sub-paragraphs (2) and (3).
(6)Where, on the date on which the accounts are drawn up, land and buildings have been sold or are to be sold within the short term, the value arrived at in accordance with sub-paragraphs (2) and (4) shall be reduced by the actual or estimated realisation costs.
(7)Where it is impossible to determine the market value of a land and buildings item, the value arrived at on the basis of the principle of purchase price or production cost shall be deemed to be its current value.
27(1)Where—
(a)the value of any asset of a company is determined in accordance with paragraph 22 or 23 above, and
(b)in the case of a determination under paragraph 22 above, the asset falls to be included under Assets item C.I,
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 cost or any value previously so determined for that asset; and paragraphs 31 to 35 and 37 below shall apply accordingly in relation to any such asset with the substitution for any reference to its cost of a reference to the value most recently determined for that asset in accordance with paragraph 22 or 23 above (as the case may be).
(2)The amount of any provision for depreciation required in the case of any asset by paragraph 32 or 33 below as it applies by virtue of sub-paragraph (1) is referred to below 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 asset the amount of any provision for depreciation in respect of that asset included in any item shown in the profit and loss account in respect of amounts written off assets of the description in question 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.
28(1)This paragraph applies where the amounts to be included in respect of assets covered by any items shown in a company’s accounts have been determined in accordance with paragraph 22 or 23 above.
(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)The purchase price of investments valued in accordance with paragraph 22 above shall be disclosed in the notes to the accounts.
(4)In the case of each balance sheet item valued in accordance with paragraph 23 above either —
(a)the comparable amounts determined according to the historical cost accounting rules (without any provision for depreciation or diminution in value); 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.
(5)In sub-paragraph (4) above, 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 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.
29(1)Subject to sub-paragraph (7) below, with respect to any determination of the value of an asset of a company in accordance with paragraph 22 or 23 above, 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 Liabilities item A.III, but need not be shown under the name “revaluation reserve”.
(3)An amount may be transferred
[F2(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 [F3sub-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.
(7)This paragraph does not apply to the difference between the valuation of investments and their purchase price or previous valuation shown in the long term business technical account or the non-technical account in accordance with note (9) on the profit and loss account format.
Textual Amendments
F2Sch. 9A Pt. I para. 29(3)(a)(b) substituted (2.2.1996) for Sch. 9A Pt. I para. 29(3)(a)(b) and preceding words by S.I. 1996/189, reg. 14(7), Sch. 5 paras. 1, 5(1)(2) (with reg. 16)
F3Words in Sch. 9A Pt. I para. 29(4) substituted (2.2.1996) by S.I. 1996/189, reg. 14(7), Sch. 5 paras. 1, 5(1)(3) (with reg. 16)