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Accounts and reports—glossary of terms

Accounts and reports—glossary of terms STOP PRESS: A significant restructuring of the UK listing regime came into effect on 29 July 2024 which included the removal of the premium and standard listing segments and the creation of a single listing category for equity shares in commercial companies. The commercial companies category is heavily disclosure-based and sits alongside other listing categories such as the shell companies, secondary listing and closed ended investment fund categories. A new UK Listing Rules sourcebook came into force to implement the changes and the previous Listing Rules sourcebook was revoked. For further information, see Practice Note: Reform of the UK listing regime—fundamentals. This Practice Note reflects the listing regime as it was prior to 29 July 2024. A Abbreviated accounts If the accounts of a small company (that is not a micro-entity) relate to financial years beginning before 1 January 2016 (see the Companies, Partnerships and Groups (Accounts and Reports) Regulations 2015 (SI 2015/980)), it may file abbreviated accounts at Companies House,...

Introduction to company accounts for lawyers

Introduction to company accounts for lawyers This Practice Note gives an overview of what needs to be included in a set of company financial statements for companies applying FRS 102 (UK GAAP) or International Financial Reporting Standards (IFRS). It focuses on the most significant financial information that needs to be included in the accounts (the ‘primary statements’) but does not cover in detail the notes that need to be included in a set of financial statements, other than incidentally. This note also looks at the different reserves a company may present on its balance sheet, and an overview of what they can be used for. The core principle underpinning the preparation of financial statements is that they are required to show a true and fair view of the income and expenditure, financial position and cash flows of the company for the relevant financial reporting period. This does not mean that they need to be accurate to the penny, but does mean that they...

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What is a capital contribution reserve?

What is a capital contribution reserve? A capital contribution reserve typically arises when an irrevocable gift has been made to a company by a shareholder (ie new shares are not issued in consideration). Such a payment often arises in the context of overseas companies, where a parent company makes a long term loan to a subsidiary at a below market rate of interest. The difference between the face value of the loan, and its discounted value using a market rate of interest, is required to be credited to a capital contribution reserve. The Privy Council (PC) case of Keller v Williams [2000] 2 BCLC 390 explored the context in which capital contributions might arise and how the funds might be used. The dispute centred on whether the funds paid were to be treated as capital contributions (as shown in the company's records) or as shareholders' loans. The PC, upholding the decision of the lower courts, held ‘…If the shareholders of a company...

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In-house Advisor weekly highlights—30 September 2021

Welcome to this week’s edition of the In-house weekly highlights, a curated summary of news analysis and new content from across the legal landscape. These highlights focus on key risk & compliance, commercial, corporate, information law and employment developments that will be relevant to most in-house lawyers.

Corporate weekly highlights—30 September 2021

This week's edition of Corporate weekly highlights includes the Lloyd’s Market Association’s updated guidance on cyber exposures in directors’ and officers’ liability insurance policies, a new Financial Reporting Lab project on companies’ production of ESG data and an article by Sarah Fortt, counsel at Vinson & Elkins LLP, on establishing an ESG committee.