Part VIIU.K. Accounts and Audit

Modifications etc. (not altering text)

C1Pt. VII (ss. 221–262) applied with modifications by S.I. 1985/680, regs. 4–6, Sch.

C2Part VII (ss. 221-262) continued by S.I. 1990/355, arts. 6, 7, Sch. 2 para. 13(1)(a)

C3Part VII (ss. 221-262) amended by S.I. 1990/355, arts. 6, 7, Sch. 2 para. 1(2)(5)

C4Part VII (ss. 221-262) extended by S.I. 1990/355, arts. 6, 7, Sch. 2 para. 1(3)(5)

C5Part VII (ss. 221-262) modified by S.I. 1990/355, arts. 6, 7, Sch. 2 paras. 1(4)(5), 3(2)(3)

C6Part VII (ss. 221-262) excluded by S.I. 1990/355, arts. 6, 7, Sch. 2 para. 3(1)(3)

C7Part VII (ss. 221-262) restricted by S.I. 1990/355, arts. 6, 7, Sch. 2 para. 13(1)(b)

Pt. VII (ss. 221-262) applied (with modifications) (21.7.1993) by S.I. 1993/1820, reg. 4, Sch. paras.1, 2 (as amended (1.10.2005) by S.I. 2005/1987, reg. 3)

Pt. VII (ss. 221-262) applied (with modifications) (6.4.2001) by S.I. 2001/1090, reg. 3, Sch. 1 (as amended (4.3.2004) by S.I. 2004/355, art. 8, (1.10.2005) by S.I. 2005/1989, reg. 2, Sch. 1 and (12.1.2006) by S.I. 2005/3442, reg. 2(2)(b), Sch. 2 para. 3(1))

Chapter IIIU.K. Supplementary Provisions

Other interpretation provisionsE+W+S

[F1262 Minor definitions.E+W+S

(1)In this Part—

  • F2. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

  • “annual accounts” means—

    (a)

    the individual accounts required by section 226, and

    (b)

    any group accounts required by section 227,

    (but see also section 230 (treatment of individual profit and loss account where group accounts prepared));

  • “annual report”, in relation to a company, means the directors’ report required by section 234;

  • “balance sheet date” means the date as at which the balance sheet was made up;

  • “capitalisation”, in relation to work or costs, means treating that work or those costs as a fixed asset;

  • [F3“Companies Act accounts” means Companies Act individual accounts or Companies Act group accounts;]

  • [F4 “credit institution” means a credit institution as defined in [F5Article 4(1)(a) of Directive 2006/48/EC of the European Parliament and of the Council of 14 June 2006] relating to the taking up and pursuit of the business of credit institutions, that is to say an undertaking whose business is to receive deposits or other repayable funds from the public and to grant credits for its own account;]

  • F6. . .

  • [F7“e-money issuer” means a person who has permission under Part 4 of the Financial Services and Markets Act 2000 to carry on the activity of issuing electronic money within the meaning of article 9B of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 F8;]

  • “fixed assets” means assets of a company which are intended for use on a continuing basis in the company’s activities, and “current assets” means assets not intended for such use;

  • “group” means a parent undertaking and its subsidiary undertakings;

  • [F9“IAS accounts” means IAS individual accounts or IAS group accounts;]

  • [F10“IAS Regulation” means EC Regulation No. 1606/2002 of the European Parliament and of the Council of 19th July 2002 on the application of international accounting standards;]

  • “included in the consolidation”, in relation to group accounts, or “included in consolidated group accounts”, means that the undertaking is included in the accounts by the method of full (and not proportional) consolidation, and references to an undertaking excluded from consolidation shall be construed accordingly;

  • [F11“international accounting standards” means the international accounting standards, within the meaning of the IAS Regulation, adopted from time to time by the European Commission in accordance with that Regulation;]

  • F12. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

  • [F13“MiFID investment firm” means an investment firm within the meaning of Article 4.1.1 of Directive 2004/39/EC of the European Parliament and of the Council of 21 April 2004 on markets in financial instruments F14, other than—

    (a)

    a company to which that Directive does not apply by virtue of Article 2 of that Directive,

    (b)

    a company which is an exempt investment firm within the meaning of regulation 4A(3) of the Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations 2007 F15, and

    (c)

    any other company which fulfils all the requirements set out in regulation 4C(3) of those Regulations;

  • [F16“profit and loss account”, in relation to a company that prepares IAS accounts, includes an income statement or other equivalent financial statement required to be prepared by international accounting standards;]

  • “purchase price”, in relation to an asset of a company or any raw materials or consumables used in the production of such an asset, includes any consideration (whether in cash or otherwise) given by the company in respect of that asset or those materials or consumables, as the case may be;

  • “qualified”, in relation to an auditors’ report, means that the report does not state the auditors’ unqualified opinion that the accounts have been properly prepared in accordance with this Act or, in the case of an undertaking not required to prepare accounts in accordance with this Act, under any corresponding legislation under which it is required to prepare accounts;

  • [F17“quoted company” means a company whose equity share capital—

    (a)

    has been included in the official list in accordance with the provisions of Part VI of the Financial Services and Markets Act 2000; or

    (b)

    is officially listed in an EEA State; or

    (c)

    is admitted to dealing on either the New York Stock Exchange or the exchange known as Nasdaq;

    and in paragraph (a) “the official list” shall have the meaning given it by section 103(1) of the Financial Services and Markets Act 2000;

  • [F18“regulated activity” has the meaning given by section 744, except that it does not include activities of the kind specified in any of the following provisions of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001—

    (a)

    article 25A (arranging regulated mortgage contracts),

    (aa)

    [F19article 25B (arranging regulated home reversion plans),

    (ab)

    article 25C (arranging regulated home purchase plans),]

    (b)

    article 39A (assisting administration and performance of a contract of insurance),

    (c)

    article 53A (advising on regulated mortgage contracts), [F20...

    (ca)

    article 53B (advising on regulated home reversion plans),

    (cb)

    article 53C (advising on regulated home purchase plans), F21. . . ]

    (d)

    article 21 (dealing as agent), article 25 (arranging deals in investments) or article 53 (advising on investments) where the activity concerns relevant investments that are not contractually based investments (within the meaning of article 3 of that Order)[F22, or

    (e)

    article 64 (agreeing to carry on a regulated activity of the kind mentioned in paragraphs (a) to (d) above);]

  • F23. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]

  • “turnover”, in relation to a company, means the amounts derived from the provision of goods and services falling within the company’s ordinary activities, after deduction of—

    (i)

    trade discounts,

    (ii)

    value added tax, and

    (iii)

    any other taxes based on the amounts so derived.

  • [F24“UCITS management company” has the same meaning as in the Collective Investment Schemes (UCITS Amending Directive) Instrument 2003 made by the Financial Services Authority under the Financial Services and Markets Act 2000 F25.]

(2)In the case of an undertaking not trading for profit, any reference in this Part to a profit and loss account is to an income and expenditure account; and references to profit and loss and, in relation to group accounts, to a consolidated profit and loss account shall be construed accordingly.

[F26(2A)References in this Part to accounts giving a “true and fair view” are references–

(a)in the case of Companies Act individual accounts, to the requirement under section 226A that such accounts give a true and fair view;

(b)in the case of Companies Act group accounts, to the requirement under section 227A that such accounts give a true and fair view; and

(c)in the case of IAS accounts, to the requirement under international accounting standards that such accounts achieve a fair presentation.]

(3)References in this Part to “realised profits” and “realised losses”, in relation to a company’s accounts, are to such profits or losses of the company as fall to be treated as realised in accordance with principles generally accepted, at the time when the accounts are prepared, with respect to the determination for accounting purposes of realised profits or losses.

This is without prejudice to—

(a)the construction of any other expression (where appropriate) by reference to accepted accounting principles or practice, or

(b)any specific provision for the treatment of profits or losses of any description as realised.]]]

Textual Amendments

F1New ss. 259–262A inserted (subject to the saving and transitional provisions in S.I. 1990/355, arts. 6–9, Sch. 2) by Companies Act 1989 (c. 40, SIF 27), ss. 1, 22, 213(2) as part of the text inserted in place of ss. 221–262 (as mentioned in s. 1(a) of the 1989 Act)

F3S. 262(1): definition of "Companies Act accounts" inserted (12.11.2004 with effect as mentioned in reg. 1(2) of the amending S.I.) by The Companies Act 1985 (International Accounting Standards and Other Accounting Amendments) Regulations 2004 (S.I. 2004/2947), reg. 3, Sch. 1 para. 20(2)(a)

F4S. 262(1): definition substituted (22.11.2000) by S.I. 2000/1430, art. 2(3)

F5Words in definition of "credit institution" in s. 262(1) substituted (1.1.2007) by The Capital Requirements Regulations 2006 (S.I. 2006/3221), reg. 1(1), Sch. 4 para. 2(3)

F6S. 262(1): definition omitted (20.10.1997) by virtue of S.I. 1997/2306, reg. 4(2)

F7S. 262(1): definition of "e-money issuer" inserted (8.11.2006 with application as mentioned in reg. 1(2) of the amending S.I.) by The Companies Act 1985 (Small Companies' Accounts and Audit) Regulations 2006 (S.I. 2006/2782), reg. 6(2)

F9S. 262(1): definition of "IAS accounts" inserted (12.11.2004 with effect as mentioned in reg. 1(2) of the amending S.I.) by The Companies Act 1985 (International Accounting Standards and Other Accounting Amendments) Regulations 2004 (S.I. 2004/2947), reg. 3, Sch. 1 para. 20(2)(b)

F10S. 262(1): definition of "IAS Regulation" inserted (12.11.2004 with effect as mentioned in reg. 1(2) of the amending S.I.) by The Companies Act 1985 (International Accounting Standards and Other Accounting Amendments) Regulations 2004 (S.I. 2004/2947), reg. 3, Sch. 1 para. 20(2)(c)

F11S. 262(1): definition of "international accounting standards" inserted (12.11.2004 with effect as mentioned in reg. 1(2) of the amending S.I.) by The Companies Act 1985 (International Accounting Standards and Other Accounting Amendments) Regulations 2004 (S.I. 2004/2947), reg. 3, Sch. 1 para. 20(2)(d)

F12S. 262(1): definition of "ISD investment firm" omitted (1.11.2007 with effect for financial years ending on or after that date) by virtue of The Markets in Financial Instruments Directive (Consequential Amendments) Regulations 2007 (S.I. 2007/2932), regs. 1(2), 2(6)(a) (with reg. 8)

F13S. 262(1): definition of "MiFID investment firm" inserted (1.11.2007 with effect for financial years ending on or after that date) by The Markets in Financial Instruments Directive (Consequential Amendments) Regulations 2007 (S.I. 2007/2932), regs. 1(2), 2(6)(b) (with reg. 8)

F14OJ No L 145, 30.4.2004, p.1.

F16S. 262(1): definition of "profit and loss account" inserted (12.11.2004 with effect as mentioned in reg. 1(2) of the amending S.I.) by The Companies Act 1985 (International Accounting Standards and Other Accounting Amendments) Regulations 2004 (S.I. 2004/2947), reg. 3, Sch. 1 para. 20(2)(e)

F18S. 262: definition of "regulated activity" inserted (5.9.2005 with application as mentioned in art. 1(2) of the amending S.I.) by The Companies Act 1985 (Investment Companies and Accounting and Audit Amendments) Regulations 2005 (S.I. 2005/2280), reg. 17(1)

F19S. 262(1): in the definition of "regulated activity" paragraphs (aa)(ab) inserted (6.11.2006 for specified purposes otherwise 6.4.2007) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No.2) Order 2006 (S.I. 2006/2383), arts. 1(2), 26(a)

F20S. 262(1): in the definition of "regulated activity" paragraphs (ca)(cb) inserted and the word "or" at the end of paragraph (c) deleted (6.11.2006 for specified purposes otherwise 6.4.2007) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No.2) Order 2006 (S.I. 2006/2383), arts. 1(2), 26(b)

F21S. 262(1): in the definition of "regulated activity" word at the end of (cb) omitted (8.11.2006 with application as mentioned in reg. 1(2) of the amending S.I.) by virtue of The Companies Act 1985 (Small Companies' Accounts and Audit) Regulations 2006 (S.I. 2006/2782), reg. 6(3)(a)

F22S. 262(1): in the definition of "regulated activity" the word "or" and (e) inserted (8.11.2006 with application as mentioned in reg. 1(2) of the amending S.I.) by The Companies Act 1985 (Small Companies' Accounts and Audit) Regulations 2006 (S.I. 2006/2782), reg. 6(3)(b)

F23S. 262(1): definition of "true and fair view" omitted (12.11.2004 with effect as mentioned in reg. 1(2) of the amending S.I.) by virtue of The Companies Act 1985 (International Accounting Standards and Other Accounting Amendments) Regulations 2004 (S.I. 2004/2947), reg. 3, Sch. 1 para. 20(2)(f)

F24S. 262(1): definition of "UCITS management company" inserted (8.11.2006 with application as mentioned in reg. 1(2) of the amending S.I.) by The Companies Act 1985 (Small Companies' Accounts and Audit) Regulations 2006 (S.I. 2006/2782), reg. 6(2)

F25FSA Instrument 2003/47, made on 17th July 2003 and published by the FSA at http://fsahandbook.info/FSA/handbook/LI/2003/2003_47.pdf.