The Friendly Societies (Accounts and Related Provisions) Regulations 1994

1. Introductory Text

2. PART I PRELIMINARY

   1. 1. Citation and commencement

   2. 2. Interpretation

   3. 3. Application

3. PART II— ACCOUNTS

   1. 4. Annual accounts—single accounts society

   2. 5. Annual accounts—group accounts society

   3. 6. Content and form of accounts

   4. 7. Group accounts—supplementary provisions

   5. 8. Notes to annual accounts

   6. 9. Associated bodies

   7. 10. Accounting principles and rules

   8. 11. Annual accounts—non-directive society

4. PART III— COMMITTEE OF MANAGEMENT'S ANNUAL REPORT

   1. 12. Committee of management’s annual report

5. PART IV— MISCELLANEOUS AND GENERAL

   1. 13. Transitional provisions

   2. 14. Interpretation of Schedules

6. Signature

7. 1. SCHEDULE 1

      1. PART I INCOME AND EXPENDITURE ACCOUNT FORMAT

         1. I. Technical account—General business

            1. 1. Earned premiums, net of reinsurance (a) gross premiums written (1)...

            2. 2. Allocated investment return transferred from the non-technical account (item III.6)...

            3. 2a. Investment income (8)(10) (a) income from shares in subsidiaries

            4. 3. Other technical income, net of reinsurance

            5. 4. Claims incurred, net of reinsurance (4) (a) claims paid

            6. 5. Change in other technical provisions, net of reinsurance, not shown...

            7. 6. Bonuses and rebates, net of reinsurance (5)

            8. 7. Net operating expenses (a) acquisition costs (6)

            9. 8. Other technical charges, net of reinsurance

            10. 9. Investment expenses and charges (8) (a) investment management expenses, including...

            11. 10. Sub-total (balance on the technical account for general business) (item...

         2. II. Technical account—Long term business

            1. 1. Earned premiums, net of reinsurance (a) gross premiums written (1)...

            2. 2. Investment income (8)(10) (a) income from shares in subsidiaries

            3. 3. Unrealised gains on investments (9)

            4. 4. Other technical income, net of reinsurance

            5. 5. Claims incurred, net of reinsurance (4) (a) claims paid

            6. 6. Change in other technical provisions, net of reinsurance, not shown...

            7. 7. Bonuses and rebates, net of reinsurance (5)

            8. 8. Net operating expenses (a) acquisition costs (6)

            9. 9. Investment expenses and charges (8) (a) investment management expenses, including...

            10. 10. Unrealised losses on investments (9)

            11. 11. Other technical charges, net of reinsurance

            12. 11a. Tax attributable to the long term business

            13. 12. Allocated investment return transferred to the non-technical account (item III.4)...

            14. 12a. Transfers to or from the fund for future appropriations

            15. 13. Sub-total (balance on the technical account—long term business) (item III.2)...

         3. III. Non-technical account

            1. 1. Balance on the general business technical account—(item I.10)

            2. 2. Balance on the long term business technical account—(item II.13)

            3. 3. Investment income (8) (a) income from shares in subsidiaries

            4. 3a. Unrealised gains on investments (9)

            5. 4. Allocated investment return transferred from the long term business technical...

            6. 5. Investment expenses and charges (8) (a) investment management expenses, including...

            7. 5a. Unrealised losses on investments (9)

            8. 6. Allocated investment return transferred to the general business technical account...

            9. 7. Other income

            10. 8. Other charges, including value adjustments

            11. 8a. Excess of income over expenditure on ordinary activities before tax...

            12. 9. Tax on excess of income over expenditure on ordinary activities...

            13. 10. Excess of income over expenditure on ordinary activities after tax...

            14. 11. Extraordinary income

            15. 12. Extraordinary charges

            16. 13. Extraordinary gain or loss

            17. 14. Tax on extraordinary gain or loss

            18. 15. Other taxes not shown under the preceding items

            19. 16. Excess of income over expenditure for the financial year

      2. PART II FORMAT OF CONSOLIDATED INCOME AND EXPENDITURE ACCOUNT

      3. PART III NOTES ON THE INCOME AND EXPENDITURE FORMAT

   2. SCHEDULE 2

      1. PART I BALANCE SHEET FORMAT

         1. ASSETS

            1. A. Intangible assets

            2. B. Investments

            3. C. Assets held to cover linked liabilities (11)

            4. D. Reinsurers' share of technical provisions (12)

            5. E. Debtors (13)

            6. F. Other assets

            7. G. Prepayments and accrued income

         2. LIABILITIES

            1. A. Reserves

            2. B. Subordinated liabilities (17)

            3. Ba. Fund for future appropriations (18)

            4. C. Technical provisions

            5. D. Technical provisions for linked liabilities (24)

            6. E. Provisions for other risks and charges

            7. F. Deposits received from reinsurers (25)

            8. G. Creditors (26)

            9. H. Accruals and deferred income

      2. PART II FORMAT OF CONSOLIDATED BALANCE SHEET

      3. PART III NOTES ON THE BALANCE SHEET FORMAT

      4. PART IV SPECIAL RULES FOR BALANCE SHEET FORMAT

         1. 1. Additional items

         2. 2. Managed funds

         3. 3. Deferred acquisition costs

   3. SCHEDULE 3

      FORM AND CONTENT OF THE ANNUAL ACCOUNTS OF A GROUP ACCOUNTS SOCIETY

      1. 1. General Rules

      2. 2. (1) Where assets and liabilities to be included in the...

      3. 5. Elimination of group transactions

      4. 6. Acquisition accounting

      5. 7. An acquisition must be accounted for by the acquisition method...

      6. 8. (1) The acquisition method of accounting is as follows.

      7. 9. (1) The following information with respect to acquisitions taking place...

      8. 10. (1) There must be stated in a note to the...

      9. 11. Where during the financial year there has been a disposal...

      10. 12. The information required by paragraphs 9, 10, or 11 need...

      11. 13. Minority interests

   4. SCHEDULE 4

      NOTES TO ANNUAL ACCOUNTS

      1. 1. Accounting policies

      2. 2. Sums denominated in foreign currencies

      3. 3. Staff

      4. 4. Aggregate amount of committee members' emoluments

      5. 5. Details of chairman’s and committee members' emoluments

      6. 6. Emoluments waived

      7. 7. Pensions of committee members and past committee members

      8. 8. Compensation to committee members for loss of office

      9. 9. Sums paid to third parties in respect of committee members' services

      10. 10. Supplementary provisions regarding committee members' emoluments

      11. 11. (1) The amounts to be shown for any financial year...

      12. 12. Where the Chief Executive of the society is not also...

      13. 13. Regulation 8(2)(b) does not apply to paragraphs 4 to 12....

      14. 14. Interpretation of provisions regarding committee members' emoluments

      15. 15. Assets

      16. 16. Where any assets of the society (other than listed investments)...

      17. 17. In relation to any amount which is included under Asset...

      18. 18. Investments

      19. 19. Reserves and provisions

      20. 20. Provision for taxation

      21. 21. Details of indebtedness

      22. 22. Guarantees and other financial commitments

      23. 23. Dealings with or interests in subsidiaries and jointly controlled bodies

      24. 24. Separate statement of certain items of income and expenditure

      25. 25. Taxation

      26. 26. Particulars of business

      27. 27. (1) As regards long term business, the society must disclose:...

      28. 28. (1) Subject to sub-paragraph (2) below, there must be disclosed...

      29. 29. Commissions

      30. 30. Miscellaneous matters

      31. 31. Committee members' loans and transactions

      32. 32. Industrial Assurance

   5. SCHEDULE 5

      NOTES TO ANNUAL ACCOUNTS: INFORMATION IN RESPECT OF ASSOCIATED BODIES

      1. PART I SOCIETIES NOT REQUIRED TO PREPARE CONSOLIDATED ACCOUNTS

         1. 1. Subsidiaries

         2. 2. Holdings in subsidiaries

         3. 3. Financial years of subsidiaries

         4. 4. Further information about subsidiaries

         5. 5. Significant holdings in bodies corporate other than subsidiaries

         6. 6. (1) The name of the body corporate must be stated....

         7. 7. (1) Where the society has a significant holding in a...

         8. 8. Construction of references to shares held by society

      2. PART II SOCIETIES REQUIRED TO PREPARE CONSOLIDATED ACCOUNTS

         1. 9. Subsidiaries

         2. 10. Holdings in subsidiaries

         3. 11. Financial years of subsidiaries

         4. 12. Further information about subsidiaries excluded from consolidation

         5. 13. Jointly controlled bodies

         6. 14. Other significant holdings of society or group

         7. 15. (1) The name of the body corporate must be stated....

         8. 16. (1) Where the society has a significant holding in a...

         9. 17. (1) The information required by paragraphs 18 and 19 must...

         10. 18. (1) The name of the body corporate must be stated....

         11. 19. (1) Where the holding of the group amounts to 20...

         12. 20. Construction of references to shares held by society or group

      3. PART III SUPPLEMENTARY PROVISIONS

         1. 21. The information required by paragraphs 6, 15 and 18 of...

         2. 22. For the purposes of paragraphs 4 and 12 of this...

   6. SCHEDULE 6

      ACCOUNTING PRINCIPLES AND RULES

      1. PART I ACCOUNTING PRINCIPLES

         1. 1. Preliminary

         2. 2. Accounting principles

         3. 3. Accounting policies must be applied consistently within the same accounts...

         4. 4. The amount of any item must be determined on a...

         5. 5. Except so far as these Regulations otherwise specify, income and...

         6. 6. In determining the aggregate amount of any item the amount...

      2. PART II DEPARTURE FROM ACCOUNTING PRINCIPLES

         1. 7. If it appears to the committee of management of a...

      3. PART III CURRENT VALUE ACCOUNTING RULES

         1. 8. Preliminary

         2. 9. The same valuation method must be applied to all investments...

         3. 10. Valuation of assets: general

         4. 11. (1) Intangible assets other than goodwill may be shown at...

         5. 12. Alternative valuation of fixed-income securities

         6. 13. Meaning of “current value”

         7. 14. (1) In the case of land and buildings, current value...

         8. 15. Application of the depreciation rules

         9. 16. (1) This paragraph applies where the amounts to be included...

         10. 17. Revaluation reserve

      4. PART IV HISTORICAL COST ACCOUNTING RULES

         1. Preliminary

            1. 18. Subject to paragraphs 8 to 17 above, the amounts to...

         2. Valuation of assets

            1. 19. General rules

            2. 20. In the case of any asset included under Assets item...

            3. 21. (1) This paragraph applies to any asset included under Assets...

            4. 22. (1) This paragraph applies to assets included under Assets items...

            5. 23. Development costs

            6. 24. Goodwill

      5. PART V MISCELLANEOUS AND SUPPLEMENTAL

         1. 25. Excess of money owed over value received as an asset item

         2. 26. Assets included at a fixed amount

         3. 27. Determination of cost

         4. 28. (1) Subject to the qualification mentioned below, the cost of...

         5. 29. Substitution of original amount where price or cost unknown

         6. 30. Assets and liabilities denominated in foreign currencies

         7. 31. (1) Subject to subparagraph (2), any difference between the amount...

         8. 32. The provisions of this Schedule which relate to long term...

      6. PART VI RULES FOR DETERMINING PROVISIONS

         1. 33. Preliminary

         2. 34. Technical provisions

         3. 35. Provision for unearned premiums

         4. 36. Provision for unexpired risks

         5. 37. Long term business provision

         6. Provisions for claims outstanding

         7. 38. General business

         8. 39. (1) Explicit discounting or deductions to take account of investment...

         9. 40. Long term business

   7. SCHEDULE 7

      ANNUAL ACCOUNTS OF NON-DIRECTIVE SOCIETY

      1. PART I FORMAT OF NON-DIRECTIVE SOCIETY INCOME AND EXPENDITURE ACCOUNT

         1. 1. Income (a) Contributions (b) (i) Rents from Land and Buildings...

         2. 2. Expenditure (a) Sickness benefits (b) Endowments on maturity

         3. 3. Excess of income over expenditure

      2. PART II FORMAT OF NON-DIRECTIVE SOCIETY BALANCE SHEET

         1. Assets

            1. A. Investments

               1. I. Land and buildings

               2. II. Mortgages on Land and Buildings

               3. III. British Government and British Government Guaranteed Securities

               4. IV. Other investments

            2. B. Debtors

            3. C. Other assets

               1. I. Tangible assets

               2. II. Cash at bank and in hand

               3. III. Other prepayments and accrued income

         2. Liabilities

            1. A. Benefit and Benefit Reserves Funds

               1. I. Sickness

               2. II. Death

               3. III. Members' fund

               4. IV. Other Benefit and Benefit Reserves Funds

               5. V. Management Fund

            2. B. Corporation tax provisions

            3. C. Creditors

               1. I. Other creditors including taxation and social security

               2. II. Accruals and deferred income

      3. PART III NOTES TO ANNUAL ACCOUNTS OF NON-DIRECTIVE SOCIETY

   8. SCHEDULE 8

      COMMITTEE OF MANAGEMENT'S ANNUAL REPORT

      1. PART I SOCIETY

         1. 1. There must be stated names of the persons who, at...

         2. 2. The committee of management’s annual report must contain:

         3. 3. (1) If significant changes in the fixed assets of the...

         4. 4. (1) Subject to subparagraphs (2) and (3), the committee of...

         5. 5. (1) This paragraph applies to the committee of management’s annual...

         6. 6. (1) If at the end of the financial year the...

         7. 7. The remuneration to be taken into account under paragraph 6(1)(b)...

         8. 8. There must be contained in the committee of management’s annual...

         9. 9. There must be stated in the committee of management’s annual...

         10. 10. (1) The following applies if the society or any subsidiary...

         11. 11. The committee of management’s annual report must contain particulars of...

      2. PART II NON-DIRECTIVE SOCIETY

         1. 12. The following paragraphs of Part I of this Schedule are...

   9. SCHEDULE 9

      INTERPRETATION OF SCHEDULES

      1. 1. The following paragraphs apply for the purposes of the interpretation...

      2. 2. Balance sheet date

      3. 3. Leases

      4. 4. Listed investments

      5. 5. Loans

      6. 6. Materiality

      7. 7. Provisions

      8. 8. Scots land tenure

      9. 9. Staff costs

      10. 10. Other definitions

8. Explanatory Note