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The Companies (Northern Ireland) Order 1986

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Point in time view as at 01/01/2006.

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Articles 236, 238

SCHEDULE 4 F1N.I.FORM AND CONTENT OF COMPANY ACCOUNTS

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F1mod. SR 1986/305

PART IN.I.GENERAL RULES AND FORMATS

SECTION AN.I.GENERAL RULES

1.  (1)  Subject to the following provisions of this Schedule—

(a)every balance sheet of a company shall show the items listed in either of the balance sheet formats set out in section B; and

(b)every profit and loss account of a company shall show the items listed in any one of the profit and loss account formats so set out,

in either case in the order and under the headings and sub-headings given in the format adopted.

(2) Sub-paragraph (1) is not to be read as requiring the heading or sub-heading for any item to be distinguished by any letter or number assigned to that item in the format adopted.

2.  (1)  Where in accordance with paragraph 1 a company's balance sheet or profit and loss account for any financial year has been prepared by reference to one of the formats set out in section B, the directors of the company shall adopt the same format in preparing the accounts for subsequent financial years of the company unless in their opinion there are special reasons for a change.

(2) Particulars of any change in the format adopted in preparing a company's balance sheet or profit and loss account in accordance with paragraph 1 shall be disclosed, and the reasons for the change shall be explained, in a note to the accounts in which the new format is first adopted.

3.  (1)  Any item required in accordance with paragraph 1 to be shown in a company's balance sheet or profit and loss account may be shown in greater detail than required by the format adopted.

(2) A company's balance sheet or profit and loss account may include an item representing or covering the amount of any asset or liability, income or expenditure not otherwise covered by any of the items listed in the format adopted, but the following shall not be treated as assets in any company's balance sheet—

(a)preliminary expenses;

(b)expenses of and commission on any issue of shares or debentures; and

(c)costs of research.

(3) In preparing a company's balance sheet or profit and loss account the directors of the company shall adapt the arrangement and headings and sub-headings otherwise required by paragraph 1 in respect of items to which an Arabic number is assigned in the format adopted, in any case where the special nature of the company's business requires such adaptation.

(4) Items to which Arabic numbers are assigned in any of the formats set out in section B may be combined in a company's accounts for any financial year if either—

(a)their individual amounts are not material to assessing the state of affairs or profit or loss of the company for that year; or

(b)the combination facilitates that assessment,

but in a case within head (b) the individual amounts of any items so combined shall be disclosed in a note to the accounts.

(5) Subject to paragraph 4(3), a heading or sub-heading corresponding to an item listed in the format adopted in preparing a company's balance sheet or profit and loss account shall not be included if there is no amount to be shown for that item in respect of the financial year to which the balance sheet or profit and loss account relates.

(6) Every profit and loss account of a company shall show the amount of the company's profit or loss on ordinary activities before taxation.

Sub‐para. (7) rep. by SR 2004/496

4.  (1)  In respect of every item shown in a company's balance sheet or profit and loss account the corresponding amount for the financial year immediately preceding that to which the balance sheet or profit and loss account relates shall also be shown.

(2) Where that corresponding amount is not comparable with the amount to be shown for the item in question in respect of the financial year to which the balance sheet or profit and loss account relates, the former amount shall be adjusted and particulars of the adjustment and the reasons for it shall be disclosed in a note to the accounts.

(3) Paragraph 3(5) does not apply in any case where an amount can be shown for the item in question in respect of the financial year immediately preceding that to which the balance sheet or profit and loss account relates, and that amount shall be shown under the heading or sub-heading required by paragraph 1 for that item.

5.  Amounts in respect of items representing assets or income may not be set off against amounts in respect of items representing liabilities or expenditure (as the case may be), or vice versa.

SECTION BN.I.THE REQUIRED FORMATS FOR ACCOUNTS

PreliminaryN.I.

6.  References in this Part to the items listed in any of the formats set out below are to those items read together with any of the notes following the formats which apply to any of those items, and the requirement imposed by paragraph 1 to show the items listed in any such format in the order adopted in the format is subject to any provision in those notes for alternative positions for any particular items.

7.  A number in brackets following any item in any of the formats set out below is a reference to the note of that number in the notes following the formats.

8.  In the notes following the formats—

(a)the heading of each note gives the required heading or sub-heading for the item to which it applies and a reference to any letters and numbers assigned to that item in the formats set out below (taking a reference in the case of Format 2 of the balance sheet formats to the item listed under “Assets” or under “Liabilities” as the case may require); and

(b)references to a numbered format are references to the balance sheet format or (as the case may require) to the profit and loss account format of that number set out below.

Balance Sheet Formats

Format 1F2

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F2mod. by 1994 c. 26

A.  Called-up share capital not paid (1)

B.  Fixed assets

I Intangible assets

1.Development costs

2.Concessions, patents, licences, trade marks and similar rights and assets (2)

3.Goodwill (3)

4.Payments on account

II Tangible assets

1.Land and buildings

2.Plant and machinery

3.Fixtures, fittings, tools and equipment

4.Payments on account and assets in course of construction

III Investments

1.Shares in[F3 group undertakings]

2.Loans to[F3 group undertakings]

3.[F3Participating interests]

4.Loans to[F3 undertakings in which the company has a participating interest]

5.Other investments other than loans

6.Other loans

7.Own shares (4)

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F31990 NI 5

C.  Current assets

I Stocks

1.Raw materials and consumables

2.Work in progress

3.Finished goods and goods for resale

4.Payments on account

II Debtors (5)

1.Trade debtors

2.Amounts owed by[F4 group undertakings]

3.Amounts owed by[F4 undertakings in which the company has a participating interest]

4.Other debtors

5.Called-up share capital not paid (1)

6.Prepayments and accrued income (6)

III Investments

1.Shares in[F4 group undertakings]

2.Own shares (4)

3.Other investments

IV Cash at bank and in hand

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F41990 NI 5

D.  Prepayments and accrued income (6)

E.  Creditors: amounts falling due within one year

1.Debenture loans (7)

2.Bank loans and overdrafts

3.Payments received on account (8)

4.Trade creditors

5.Bills of exchange payable

6.Amounts owed to[F5 group undertakings]

7.Amounts owed to[F5 undertakings in which the company has a participating interest]

8.Other creditors including taxation and social security (9)

9.Accruals and deferred income (10)

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F51990 NI 5

F.  Net current assets (liabilities) (11)

G.  Total assets less current liabilities

H.  Creditors: amounts falling due after more than one year

1.Debenture loans (7)

2.Bank loans and overdrafts

3.Payments received on account (8)

4.Trade creditors

5.Bills of exchange payable

6.Amounts owed to[F6 group undertakings]

7.Amounts owed to[F6 undertakings in which the company has a participating interest]

8.Other creditors including taxation and social security (9)

9.Accruals and deferred income (10)

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F61990 NI 5

I.  [F7Provisions for liabilities]

1.Pensions and similar obligations

2.Taxation, including deferred taxation

3.Other provisions

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F7SR 2004/496

J.  Accruals and deferred income (10)

K.  Capital and reserves

I Called-up share capital (12)

II F8 Share premium account

III Revaluation reserve

IV Other reserves

1.Capital redemption reserve

2.Reserve for own shares

3.Reserved provided for by the articles of association

4.Other reserves

V Profit and loss account

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F8mod. by SR 1986/305

Balance Sheet Formats

Format 2F9

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F9mod. by 1994 c. 26

ASSETS

A.  Called-up share capital not paid (1)

B.  Fixed assets

I Intangible assets

1.Development costs

2.Concessions, patents, licences, trade marks and similar rights and assets (2)

3.Goodwill (3)

4.Payments on account

II Tangible assets

1.Land and buildings

2.Plant and machinery

3.Fixtures, fittings, tools and equipment

4.Payments on account and assets in course of construction

III Investments

1.Shares in[F10 group undertakings]

2.Loans to[F10 group undertakings]

3.[F10Participating interests]

4.Loans to[F10 undertakings in which the company has a participating interest]

5.Other investments other than loans

6.Other loans

7.Own shares (4)

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F101990 NI 5

C.  Current assets

I Stocks

1.Raw materials and consumables

2.Work in progress

3.Finished goods and goods for resale

4.Payments on account

II Debtors (5)

1.Trade debtors

2.Amounts owed by[F11 group undertakings]

3.Amounts owed by[F11 undertakings in which the company has a participating interest]

4.Other debtors

5.Called-up share capital not paid (1)

6.Prepayments and accrued income (6)

III Investments

1.Shares in[F11 group undertakings]

2.Own shares (4)

3.Other investments

IV Cash at bank and in hand

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F111990 NI 5

D.  Prepayments and accrued income (6)

LIABILITIES

A.  Capital and reserves

I Called-up share capital (12)

II Share premium account

F12III Revaluation reserve

IV Other reserves

1.Capital redemption reserve

2.Reserve for own shares

3.Reserves provided for by the articles of association

4.Other reserves

V Profit and loss account

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F12mod. by SR 1986/305

B.  [F13Provisions for liabilities]

1.Pensions and similar obligations

2.Taxation including deferred taxation

3.Other provisions

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F13SR 2004/496

C.  Creditors (13)

1.Debenture loans (7)

2.Bank loans and overdrafts

3.Payments received on account (8)

4.Trade creditors

5.Bills of exchange payable

6.Amounts owed to[F14 group undertakings]

7.Amounts owed to[F14 undertakings in which the company has a participating interest]

8.Other creditors including taxation and social security (9)

9.Accruals and deferred income (10)

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F141990 NI 5

D.  Accruals and deferred income (10)

Notes on the balance sheet formats

(1)

Called-up share capital not paid

(Formats 1 and 2, items A and C.II.5.)

This item may be shown in either of the two positions given in Formats 1 and 2.

(2)

F15Concessions, patents, licences, trade marks and similar rights and assets

(Formats 1 and 2, item B.I.2.)

Amounts in respect of assets shall only be included in a company's balance sheet under this item if either—

(a)

the assets were acquired for valuable consideration and are not required to be shown under goodwill; or

(b)

the assets in question were created by the company itself.

(3)

Goodwill

(Formats 1 and 2, item B.I.3.)

Amounts representing goodwill shall only be included to the extent that the goodwill was acquired for valuable consideration.

(4)

Own shares

(Formats 1 and 2, items B.III.7 and C.III.2.)

The nominal value of the shares held shall be shown separately.

(5)

Debtors

(Formats 1 and 2, items C.II.1 to 6.)

The amount falling due after more than one year shall be shown separately for each item included under debtors.

(6)

Prepayments and accrued income

(Formats 1 and 2, items C.II.6 and D.)

This item may be shown in either of the two positions given in Formats 1 and 2.

(7)

Debenture loans

(Format 1, items E.1 and H.1 and Format 2, item C.1.)

The amount of any convertible loans shall be shown separately.

(8)

Payments received on account

(Format 1, items E.3 and H.3 and Format 2, item C.3.)

Payments received on account of orders shall be shown for each of these items in so far as they are not shown as deductions from stocks.

(9)

Other creditors including taxation and social security

(Format 1, items E.8 and H.8 and Format 2, item C.8.)

The amount for creditors in respect of taxation and social security shall be shown separately from the amount for other creditors.

(10)

Accruals and deferred income

(Format 1, items E.9, H.9 and J and Format 2, items C.9 and D.)

  • The two positions given for this item in Format 1 at E.9 and H.9 are an alternative to the position at J, but if the item is not shown in a position corresponding to that at J it may be shown in either or both of the other two positions (as the case may require).

  • The two positions given for this item in Format 2 are alternatives.

(11)

Net current assets (liabilities)

(Format 1, item F.)

In determining the amount to be shown for this item any amounts shown under “prepayments and accrued income” shall be taken into account wherever shown.

(12)

Called-up share capital

(Format 1, item K.I and Format 2, item A.I.)

The amount of allotted share capital and the amount of called-up share capital which has been paid up shall be shown separately.

(13)

Creditors

(Format 2, items C.1 to 9.)

Amounts falling due within one year and after one year shall be shown separately for each of these items[F16 and for the aggregate of all these items].

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F16SR 1997/314

Profit and loss account formats

Format 1

(see note (17) below)

1.

Turnover

2.

Cost of sales (14)

3.

Gross profit or loss

4.

Distribution costs (14)

5.

Administrative expenses (14)

6.

Other operating income

7.

Income from shares in[F17 group undertakings]

8.

Income from[F17 participating interests]

9.

Income from other fixed asset investments (15)

10.

Other interest receivable and similar income (15)

11.

Amounts written off investments

12.

Interest payable and similar charges (16)

13.

Tax on profit or loss on ordinary activities

14.

Profit or loss on ordinary activities after taxation

15.

Extraordinary income

16.

Extraordinary charges

17.

Extraordinary profit or loss

18.

Tax on extraordinary profit or loss

19.

Other taxes not shown under the above items

20.

Profit or loss for the financial year

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F171990 NI 5

Profit and loss account formats

Format 2

1.

Turnover

2.

Change in stocks of finished goods and in work in progress

3.

Own work capitalised

4.

Other operating income

5.
(a)

Raw materials and consumables

(b)

Other external charges

6.

Staff costs:

6.
(a)

wages and salaries

(b)

social security costs

(c)

other pension costs

7.
(a)

Depreciation and other amounts written off tangible and intangible fixed assets

(b)

Exceptional amounts written off current assets

8.

Other operating charges

9.

Income from shares in[F18 group undertakings]

10.

Income from[F18 participating interests]

11.

Income from other fixed asset investments (15)

12.

Other interest receivable and similar income (15)

13.

Amounts written off investments

14.

Interest payable and similar charges (16)

15.

Tax on profit or loss on ordinary activities

16.

Profit or loss on ordinary activities after taxation

17.

Extraordinary income

18.

Extraordinary charges

19.

Extraordinary profit or loss

20.

Tax on extraordinary profit or loss

21.

Other taxes not shown under the above items

22.

Profit or loss for the financial year

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F181990 NI 5

Profit and loss account formats

Format 3

(see note (17) below)

A.  Charges

1.Cost of sales (14)

2.Distribution costs (14)

3.Administrative expenses (14)

4.Amounts written off investments

5.Interest payable and similar charges (16)

6.Tax on profit or loss on ordinary activities

7.Profit or loss on ordinary activities after taxation

8.Extraordinary charges

9.Tax on extraordinary profit or loss

10.Other taxes not shown under the above items

11.Profit or loss for the financial year

B.  Income

1.Turnover

2.Other operating income

3.Income from shares in[F19 group undertakings]

4.Income from[F19 participating interests]

5.Income from other fixed asset investments (15)

6.Other interest receivable and similar income (15)

7.Profit or loss on ordinary activities after taxation

8.Extraordinary income

9.Profit or loss for the financial year

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F191990 NI 5

Profit and loss account formats

Format 4

A.  Charges

1.Reduction in stocks of finished goods and in work in progress

2.(a)Raw materials and consumables

(b)Other external charges

3.Staff costs:

(a)wages and salaries

(b)social security costs

(c)other pension costs

4.(a)Depreciation and other amounts written off tangible and intangible fixed assets

(b)Exceptional amounts written off current assets

5.Other operating charges

6.Amounts written off investments

7.Interest payable and similar charges (16)

8.Tax on profit or loss on ordinary activities

9.Profit or loss on ordinary activities after taxation

10.Extraordinary charges

11.Tax on extraordinary profit or loss

12.Other taxes not shown under the above items

13.Profit or loss for the financial year

B.  Income

1.Turnover

2.Increase in stocks of finished goods and in work in progress

3.Own work capitalised

4.Other operating income

5.Income from shares in[F20 group undertakings]

6.Income from[F20 participating interests]

7.Income from other fixed asset investments (15)

8.Other interest receivable and similar income (15)

9.Profit or loss on ordinary activities after taxation

10.Extraordinary income

11.Profit or loss for the financial year

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F201990 NI 5

Notes on the profit and loss account formats

(14)

Cost of sales: distribution costs: administrative expenses

(Format 1, items 2, 4 and 5 and Format 3, items A.1, 2 and 3.)

These items shall be stated after taking into account any necessary provisions for depreciation or diminution in value of assets.

(15)

Income from other fixed asset investments: other interest receivable and similar income

(Format 1, items 9 and 10: Format 2, items 11 and 12: Format 3, items B.5 and 6: Format 4, items B.7 and 8.)

Income and interest derived from[F21 group undertakings] shall be shown separately from income and interest derived from other sources.

(16)

Interest payable and similar charges

(Format 1, item 12: Format 2, item 14: Format 3, item A.5: Format 4, item A.7.)

The amount payable to[F21 group undertakings] shall be shown separately.

(17)

Formats 1 and 3

The amount of any provisions for depreciation and diminution in value of tangible and intangible fixed assets falling to be shown under items 7(a) and A.4(a) respectively in Formats 2 and 4 shall be disclosed in a note to the accounts in any case where the profit and loss account is prepared by reference to Format 1 or Format 3.

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F211990 NI 5

PART IIN.I.ACCOUNTING PRINCIPLES AND RULES

SECTION AN.I.ACCOUNTING PRINCIPLES

PreliminaryN.I.

9.  Subject to paragraph 15, the amounts to be included in respect of all items shown in a company's accounts shall be determined in accordance with the principles set out in paragraphs 10 to 14.

Accounting principlesN.I.

10.  The company shall be presumed to be carrying on business as a going concern.

Departure from the accounting principlesN.I.

15.  If it appears to the directors of a company that there are special reasons for departing from any of the principles stated above in preparing the company's accounts in respect of any financial year they may do so, but particulars of the departure, the reasons for it and its effect shall be given in a note to the accounts.

SECTION BN.I.HISTORICAL COST ACCOUNTING RULESPreliminary

N.I.

16.  [F22Subject to sections C and D], the amounts to be included in respect of all items shown in a company's accounts shall be determined in accordance with the rules set out in paragraphs 17 to 28.

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F22SR 2004/496

Fixed assetsN.I.
General rulesN.I.

17.  Subject to any provision for depreciation or diminution in value made in accordance with paragraph 18 or 19, the amount to be included in respect of any fixed asset shall be its purchase price or production cost.

18.  In the case of any fixed asset which has a limited useful economic life, the amount of—

(a)its purchase price or production cost; or

(b)where it is estimated that any such asset will have a residual value at the end of the period of its useful economic life, its purchase price or production cost less that estimated residual value,

shall be reduced by provisions for depreciation calculated to write off that amount systematically over the period of the asset's useful economic life.

19.  (1)  Where a fixed asset investment of a description falling to be included under item B.III of either of the balance sheet formats set out in Part I has diminished in value provisions for diminution in value may be made in respect of it and the amount to be included in respect of it may be reduced accordingly; and any such provisions which are not shown in the profit and loss account shall be disclosed (either separately or in aggregate) in a note to the accounts.

(2) Provisions for diminution in value shall be made in respect of any fixed asset which has diminished in value if the reduction in its value is expected to be permanent (whether its useful economic life is limited or not), and the amount to be included in respect of it shall be reduced accordingly; and any such provisions which are not shown in the profit and loss account shall be disclosed (either separately or in aggregate) in a note to the accounts.

(3) Where the reasons for which any provision was made in accordance with sub-paragraph (1) or (2) have ceased to apply to any extent, that provision shall be written back to the extent that it is no longer necessary; and any amounts written back in accordance with this sub-paragraph which are not shown in the profit and loss account shall be disclosed (either separately or in aggregate) in a note to the accounts.

Rules for determining particular fixed asset itemsN.I.

20.  (1)  Notwithstanding that an item in respect of “development costs” is included under “fixed assets” in the balance sheet formats set out in Part I, an amount may only be included in a company's balance sheet in respect of development costs in special circumstances.

(2) If any amount is included in a company's balance sheet in respect of development costs the following information shall be given in a note to the accounts—

(a)the period over which the amount of those costs originally capitalised is being or is to be written off; and

(b)the reasons for capitalising the development costs in question.

21.  (1)  The application of paragraphs 17 to 19 in relation to goodwill (in any case where goodwill is treated as an asset) is subject to the following provisions of this paragraph.

(2) Subject to sub-paragraph (3), the amount of the consideration for any goodwill acquired by a company shall be reduced by provisions for depreciation calculated to write off that amount systematically over a period chosen by the directors of the company.

(3) The period chosen shall not exceed the useful economic life of the goodwill in question.

(4) In any case where any goodwill acquired by a company is shown or included as an asset in the company's balance sheet the period chosen for writing off the consideration for that goodwill and the reasons for choosing that period shall be disclosed in a note to the accounts.

Current assetsN.I.

22.  Subject to paragraph 23, the amount to be included in respect of any current asset shall be its purchase price or production cost.

23.  (1)  If the net realisable value of any current asset is lower than its purchase price or production cost the amount to be included in respect of that asset shall be the net realisable value.

(2) Where the reasons for which any provision for diminution in value was made in accordance with sub-paragraph (1) have ceased to apply to any extent, that provision shall be written back to the extent that it is no longer necessary.

Miscellaneous and supplementary provisionsN.I.
Excess of money owed over value received as an asset itemN.I.

24.  (1)  Where the amount repayable on any debt owed by a company is greater than the value of the consideration received in the transaction giving rise to the debt, the amount of the difference may be treated as an asset.

(2) Where any such amount is so treated—

(a)it shall be written off by reasonable amounts each year and must be completely written off before repayment of the debt; and

(b)if the current amount is not shown as a separate item in the company's balance sheet it must be disclosed in a note to the accounts.

Assets included at a fixed amountN.I.

25.  (1)  Subject to sub-paragraph (2), assets which fall to be included—

(a)amongst the fixed assets of a company under the item “tangible assets”; or

(b)amongst the current assets of a company under the item “raw materials and consumables”,

may be included at a fixed quantity and value.

(2) Sub-paragraph (1) applies to assets of a kind which are constantly being replaced, where—

(a)their overall value is not material to assessing the company's state of affairs; and

(b)their quantity, value and composition are not subject to material variation.

Determination of purchase price or production costN.I.

26.  (1)  The purchase price of an asset shall be determined by adding to the actual price paid any expenses incidental to its acquisition.

(2) The production cost of an asset shall be determined by adding to the purchase price of the raw materials and consumables used the amount of the costs incurred by the company which are directly attributable to the production of that asset.

(3) In addition, there may be included in the production cost of an asset—

(a)a reasonable proportion of the costs incurred by the company which are only indirectly attributable to the production of that asset, but only to the extent that they relate to the period of production; and

(b)interest on capital borrowed to finance the production of that asset, to the extent that it accrues in respect of the period of production,

so, however, that in a case within head (b) the inclusion of the interest in determining the cost of that asset and the amount of the interest so included shall be disclosed in a note to the accounts.

(4) In the case of current assets distribution costs may not be included in production costs.

27.  (1)  Subject to the qualification mentioned below, the purchase price or production cost of—

(a)any assets which fall to be included under any item shown in a company's balance sheet under the general item “stocks”; and

(b)any assets which are fungible assets (including investments),

may be determined by the application of any of the methods mentioned in sub-paragraph (2) in relation to any such assets of the same class.

The method chosen must be one which appears to the directors to be appropriate in the circumstances of the company.

(2) Those methods are—

(a)the method known as “first in, first out” (FIFO);

(b)the method known as “last in, first out” (LIFO);

(c)a weighted average price; and

(d)any other method similar to any of the methods mentioned above.

(3) Where in the case of any company—

(a)the purchase price or production cost of assets falling to be included under any item shown in the company's balance sheet has been determined by the application of any method permitted by this paragraph; and

(b)the amount shown in respect of that item differs materially from the relevant alternative amount given below in this paragraph,

the amount of that difference shall be disclosed in a note to the accounts.

(4) Subject to sub-paragraph (5), for the purposes of sub-paragraph (3)(b), the relevant alternative amount, in relation to any item shown in a company's balance sheet, is the amount which would have been shown in respect of that item if assets of any class included under that item at an amount determined by any method permitted by this paragraph had instead been included at their replacement cost as at the balance sheet date.

(5) The relevant alternative amount may be determined by reference to the most recent actual purchase price or production cost before the balance sheet date of assets of any class included under the item in question instead of by reference to their replacement cost as at that date, but only if the former appears to the directors of the company to constitute the more appropriate standard of comparison in the case of assets of that class.

(6) For the purposes of this paragraph, assets of any description shall be regarded as fungible if assets of that description are substantially indistinguishable one from another.

Substitution of original stated amount where price or cost unknownN.I.

28.  Where there is no record of the purchase price or production cost of any asset of a company or of any price, expenses or costs relevant for determining its purchase price or production cost in accordance with paragraph 26, or any such record cannot be obtained without unreasonable expense or delay, its purchase price or production cost shall be taken for the purposes of paragraphs 17 to 23 to be the value ascribed to it in the earliest available record of its value made on or after its acquisition or production by the company.

SECTION CN.I.ALTERNATIVE ACCOUNTING RULES

PreliminaryN.I.

29.  (1)  The rules set out in section B are referred to below in this Schedule as the historical cost accounting rules.

(2) Those rules, with the omission of paragraphs 16, 21 and 25 to 28, are referred to below in this Part as the depreciation rules; and references below in this Schedule to the historical cost accounting rules do not include the depreciation rules as they apply by virtue of paragraph 32.

30.  Subject to paragraphs 32 to 34, the amounts to be included in respect of assets of any description mentioned in paragraph 31 may be determined on any basis so mentioned.

Alternative accounting rulesN.I.

31.  (1)  Intangible fixed assets, other than goodwill, may be included at their current cost.

(2) Tangible fixed assets may be included at a market value determined as at the date of their last valuation or at their current cost.

(3) Investments of any description falling to be included under item B.III of either of the balance sheet formats set out in Part I may be included either—

(a)at a market value determined as at the date of their last valuation; or

(b)at a value determined on any basis which appears to the directors to be appropriate in the circumstances of the company,

but in the latter case particulars of the method of valuation adopted and of the reasons for adopting it shall be disclosed in a note to the accounts.

(4) Investments of any description falling to be included under item C.III of either of the balance sheet formats set out in Part I may be included at their current cost.

(5) Stocks may be included at their current cost.

Application of the depreciation rulesN.I.

32.  (1)  Where the value of any asset of a company is determined on any basis mentioned in paragraph 31, 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 purchase price or production cost or any value previously so determined for that asset; and the depreciation rules shall apply accordingly in relation to any such asset with the substitution for any reference to its purchase price or production cost of a reference to the value most recently determined for that asset on any basis mentioned in paragraph 31.

(2) The amount of any provision for depreciation required in the case of any fixed asset by paragraph 18 or 19 as it applies by virtue of sub-paragraph (1) is referred to 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 fixed asset the amount of any provision for depreciation in respect of that asset—

(a)included in any item shown in the profit and loss account in respect of amounts written off assets of the description in question; or

(b)taken into account in stating any item so shown which is required by note (14) of the notes on the profit and loss account formats set out in Part I to be stated after taking into account any necessary provisions for depreciation or diminution in value of assets included under it,

may be the historical cost amount instead of the adjusted amount, so, however, that the amount of any difference between the two shall be shown separately in the profit and loss account or in a note to the accounts.

Additional information to be provided in case of departure from historical cost accounting rulesN.I.

33.  (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 on any basis mentioned in paragraph 31.

(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) In the case of each balance sheet item affected (except stocks) either—

(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,

shall be shown separately in the balance sheet or in a note to the accounts.

(4) In sub-paragraph (3), 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.

Revaluation reserveN.I.

34.  (1)  With respect to any determination of the value of an asset of a company on any basis mentioned in paragraph 31, 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 a separate sub-heading in the position given for the item “revaluation reserve” in Format 1 or 2 of the balance sheet formats set out in Part I, but need not be shown under that name.

[F23(3) An amount may be transferred

[F24(a)from the revaluation reserve—

(i)to the proft 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.

(3A) In[F24 sub-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.

(3B) The revaluation reserve shall not be reduced except as mentioned in this paragraph.]

(4) The treatment for taxation purposes of amounts credited or debited to the revaluation reserve shall be disclosed in a note to the accounts.

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F231990 NI 5

F24SR 1997/314

PART IIIN.I.NOTES TO THE ACCOUNTS

PreliminaryN.I.

35.  Any information required in the case of any company by the following provisions of this Part shall (if not given in the company's accounts) be given by way of a note to those accounts.

[F25PART IV]N.I.[F25SPECIAL PROVISIONS WHERE COMPANY IS A PARENT COMPANY OR SUBSIDIARY UNDERTAKING]

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F251990 NI 5

Company's own accountsN.I.

Para. 59 rep. by SR 1997/314

PART VN.I.SPECIAL PROVISIONS WHERE THE COMPANY IS AN INVESTMENT COMPANY

71 .F26  (1)  Paragraph 34 does not apply to the amount of any profit or loss arising from a determination of the value of any investments of an investment company on any basis mentioned in paragraph 31(3).

(2) Any provisions made by virtue of paragraph 19(1) or (2) in the case on an investment company in respect of any fixed asset investments need not be charged to the company's profit and loss account if they are either—

(a)charged against any reserve account to which any amount excluded by sub-paragraph (1) from the requirements of paragraph 34 has been credited; or

(b)shown as a separate item in the company's balance sheet under the sub-heading “other reserves”.

(3) For the purposes of this paragraph, as it applies in relation to any company, “fixed asset investment” means any asset falling to be included under any item shown in the company's balance sheet under the subdivision “investments” under the general item “fixed assets”.

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F26mod. by SR 1986/305

72 .F27  (1)  Any distribution made by an investment company which reduces the amount of its net assets to less than the aggregate of its called-up share capital and undistributable reserves shall be disclosed in a note to the company's accounts.

(2) For the purposes of this paragraph, a company's net assets are the aggregate of its assets less the aggregate of its liabilities (including any[F28 provision for liabilities] within paragraph 88[F28 that is made in Companies Order accounts and any provision that is made in IAS accounts] ); and “undistributable reserves” has the meaning given by Article 272(3).

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F27mod. by SR 1986/305

F28SR 2004/496

73 .F29  A company shall be treated as an investment company for the purposes of this Part in relation to any financial year of the company if—

(a)during the whole of that year it was an investment company as defined by Article 274, and

(b)it was not at any time during that year prohibited under Article 273(4) (no distribution where capital profits have been distributed, etc.) from making a distribution by virtue of that Article.

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F29mod. by SR 1986/305

Para. 74 rep. by 1990 NI 5

PART VIN.I.SPECIAL PROVISIONS WHERE THE COMPANY HAS ENTERED INTO ARRANGEMENTS SUBJECT TO MERGER RELIEF

Para. 75 rep. by 1990 NI 5

PART VIIN.I.INTERPRETATION OF SCHEDULE

76.  The following paragraphs apply for the purposes of this Schedule and its interpretation.

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