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(1) These Regulations may be cited as the Companies Act 1985 (Insurance Companies Accounts) Regulations 1993 and shall come into force on the day after the day on which they are made.
(2) In these Regulations “the 1985 Act ” means the Companies Act 1985.
(1) In subsection (2) of section 255 of the 1985 Act (special provisions for banking and insurance companies), for the word “may” there shall be substituted the word “shall”.
(2) Subsection (5) of that section shall be omitted.
(1) In subsection (2) of section 255A of the 1985 Act (special provisions for banking and insurance groups), for the word “may”there shall be substituted the word “shall”.
(2) For subsections (4) and (5) of that section there shall be substituted the following subsections—
(4) References in this Part to a banking group are to a group where the parent company is a banking company or where—
(a) the parent company’s principal subsidiary undertakings are wholly or mainly credit institutions, and
(b) the parent company does not itself carry on any material business apart from the acquisition, management and disposal of interests in subsidiary undertakings.
(5) References in this Part to an insurance group are to a group where the parent company is an insurance company or where —
(a) the parent company’s principal subsidiary undertakings are wholly or mainly insurance companies, and
(b) the parent company does not itself carry on any material business apart from the acquisition, management and disposal of interests in subsidiary undertakings.
(5A) For the purposes of subsections (4) and (5) above—
(a) a parent company’s principal subsidiary undertakings are the subsidiary undertakings of the company whose results or financial position would principally affect the figures shown in the group accounts, and
(b) the management of interests in subsidiary undertakings includes the provision of services to such undertakings.
(3) At the end of subsection (6) of that section there shall be inserted the words “, and as a reference to paragraphs 73, 74, 79 and 80 of Part I of Schedule 9A, in the case of the group accounts of an insurance group”.
(4) Subsection (7) of that section shall be omitted.
For Schedule 9A to the 1985 Act there shall be substituted Schedule 1 to these Regulations (form and content of accounts of insurance companies and groups).
(1) The 1985 Act shall have effect subject to the amendments specified in Schedule 2 to these Regulations (being minor amendments and amendments consequential on the provisions of these Regulations).
(2) In paragraph 3(1) of Part I of Schedule 2 to the Companies Act 1989 (Commencement No. 4 and Transitional and Saving Provisions) Order 1990 , for the words “ending prior to 1st January 1994” there shall be substituted the words “commencing before 23rd December 1994”.
(1) A company to which paragraph (2) below applies may, with respect to any financial year, prepare such annual accounts as it would have been required to prepare had the modifications to the 1985 Act effected by these Regulations not been made.
(2) This paragraph applies to—
(a) any company which is excluded from the scope of Council Directive 73/239/ EEC by Article 3 of that Directive, and
(b) any company referred to in Article 2(2) or (3) or 3 of Council Directive 79/267/EEC .
(3) The modifications effected by regulations 2 to 5 above shall, where a company prepares accounts under paragraph (1) of this Regulation, be treated (as regards that company) as not having been made.
(1) A company (including any body corporate to which Part VII of the 1985 Act is applied by any enactment) may, with respect to a financial year of the company commencing before 23rd December 1994, prepare such annual accounts as it would have been required to prepare had the modifications to the 1985 Act effected by these Regulations not been made.
(2) The modifications effected by regulations 2 to 5 above shall, where a company prepares accounts under paragraph (1) of this Regulation, be treated (as regards that company) as not having been made.
Technical account General business
(1) Earned premiums, net of reinsurance—
(a) gross premiums written (1)
(b) outward reinsurance premiums (2)
(c) change in the gross provision for unearned premiums
(d) change in the provision for unearned premiums, reinsurers' share
(2) Allocated investment return transferred from the non-technical account (item III.6) (10)
(2a) Investment income (8) (10)
(a) income from participating interests, with a separate indication of that derived from group undertakings
(b) income from other investments, with a separate indication of that derived from group undertakings
(aa) income from land and buildings
(bb) income from other investments
(c) value re-adjustments on investments
(d) gains on the realisation of investments
(3) Other technical income, net of reinsurance
(4) Claims incurred, net of reinsurance (4)
(a) claims paid
(aa) gross amount
(bb) reinsurers' share
(b) change in the provision for claims
(aa) gross amount
(bb) reinsurers' share
(5) Changes in other technical provisions, net of reinsurance, not shown under other headings
(6) Bonuses and rebates, net of reinsurance (5)
(7) Net operating expenses—
(a) acquisition costs (6)
(b) change in deferred acquisition costs
(c) administrative expenses (7)
(d) reinsurance commissions and profit participation
(8) Other technical charges, net of reinsurance
(8a) Investment expenses and charges (8)
(a) investment management expenses, including interest
(b) value adjustments on investments
(c) losses on the realisation of investments
(9) Change in the equalisation provision
(10) Sub-total (balance on the technical account for general business) (item III.1)
Technical account Long term business
(1) Earned premiums, net of reinsurance—
(a) gross premiums written (1)
(b) outward reinsurance premiums (2)
(c) change in the provision for unearned premiums, net of reinsurance (3)
(2) Investment income (8) (10)
(a) income from participating interests, with a separate indication of that derived from group undertakings
(b) income from other investments, with a separate indication of that derived from group undertakings
(aa) income from land and buildings
(bb) income from other investments
(c) value re-adjustments on investments
(d) gains on the realisation of investments
(3) Unrealised gains on investments (9)
(4) Other technical income, net of reinsurance
(5) Claims incurred, net of reinsurance (4)
(a) claims paid
(aa) gross amount
(bb) reinsurers' share
(b) change in the provision for claims
(aa) gross amount
(bb) reinsurers' share
(6) Change in other technical provisions, net of reinsurance, not shown under other headings—
(a) long term business provision, net of reinsurance (3)
(aa) gross amount
(bb) reinsurers' share
(b) other technical provisions, net of reinsurance
(7) Bonuses and rebates, net of reinsurance (5)
(8) Net operating expenses—
(a) acquisition costs (6)
(b) change in deferred acquisition costs
(c) administrative expenses (7)
(d) reinsurance commissions and profit participation
(9) Investment expenses and charges (8)
(a) investment management expenses, including interest
(b) value adjustments on investments
(c) losses on the realisation of investments
(10) Unrealised losses on investments (9)
(11) Other technical charges, net of reinsurance
(11a) Tax attributable to the long term business
(12) Allocated investment return transferred to the non-technical account (item III.4)
(12a) Transfers to or from the fund for future appropriations
(13) Sub-total (balance on the technical account long term business) (item III.2)
Non-technical account
(1) Balance on the general business technical account (item I.10)
(2) Balance on the long term business technical account (item II.13)
(3) Investment income (8)
(a) income from participating interests, with a separate indication of that derived from group undertakings
(b) income from other investments, with a separate indication of that derived from group undertakings
(aa) income from land and buildings
(bb) income from other investments
(c) value re-adjustments on investments
(d) gains on the realisation of investments
(3a) Unrealised gains on investments (9)
(4) Allocated investment return transferred from the long term business technical account (item II.12) (10)
(5) Investment expenses and charges (8)
(a) investment management expenses, including interest
(b) value adjustments on investments
(c) losses on the realisation of investments
(5a) Unrealised losses on investments (9)
(6) Allocated investment return transferred to the general business technical account (item I.2) (10)
(7) Other income
(8) Other charges, including value adjustments
(8a) Profit or loss on ordinary activities before tax
(9) Tax on profit or loss on ordinary activities
(10) Profit or loss on ordinary activities after tax
(11) Extraordinary income
(12) Extraordinary charges
(13) Extraordinary profit or loss
(14) Tax on extraordinary profit or loss
(15) Other taxes not shown under the preceding items
(16) Profit or loss for the financial year
(1) Subject to the following provisions of this Part of this Schedule —
(a) every balance sheet of a company shall show the items listed in the balance sheet format set out below in section B of this Chapter; and
(b) every profit and loss account of a company shall show the items listed in the profit and loss account format so set out,
in either case in the order and under the headings and sub-headings given in the format.
(2) Sub-paragraph (1) above 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.
(1) In its application to insurance groups, Schedule 4A shall have effect with the following modifications.
(2) In paragraph 1—
(a) for the reference in sub-paragraph (1) to the provisions of Schedule 4 there shall be substituted a reference to the provisions of Part I of this Schedule modified as mentioned in paragraph 2 below;
(b) for the reference in sub-paragraph (2) to paragraph 59 of Schedule 4 there shall be substituted a reference to paragraphs 70(6) and 71 of Part I of this Schedule; and
(c) sub-paragraph (3) shall be omitted.
(3) In paragraph 2(2)(a), for the words “three months” there shall be substituted the words “six months”.
(4) In paragraph 3, after sub-paragraph (1) there shall be inserted the following sub-paragraphs—
(1A) Sub-paragraph (1) shall not apply to those liabilities items the valuation of which by the undertakings included in a consolidation is based on the application of provisions applying only to insurance undertakings, nor to those assets items changes in the values of which also affect or establish policy holders' rights.
(1B) Where sub-paragraph (1A) applies, that fact shall be disclosed in the notes on the consolidated accounts.
(5) For sub-paragraph (4) of paragraph 6 there shall be substituted the following sub-paragraph—
(4) Sub-paragraphs (1) and (2) need not be complied with—
(a) where a transaction has been concluded according to normal market conditions and a policy holder has rights in respect of that transaction, or
(b) if the amounts concerned are not material for the purpose of giving a true and fair view.
(5) Where advantage is taken of sub-paragraph (4)(a) above that fact shall be disclosed in the notes to the accounts, and where the transaction in question has a material effect on the assets, liabilities, financial position and profit or loss of all the undertakings included in the consolidation that fact shall also be so disclosed.
(6) In paragraph 17—
(a) in sub-paragraph (1), for the reference to Schedule 4 there shall be substituted a reference to Part I of this Schedule;
(b) in sub-paragraph (2), paragraph (a) and, in paragraph (b), the words “in Format 2” shall be omitted;
(c) in sub-paragraph (3), for paragraphs (a) to (d) there shall be substituted the words “between items 10 and 11 in section III ”;
(d) in sub-paragraph (4), for paragraphs (a) to (d) there shall be substituted the words “between items 14 and 15 in section III”; and
(e) for sub-paragraph (5) there shall be substituted the following sub-paragraph—
(5) Paragraph 2(3) of Part I of Schedule 9A (power to combine items) shall not apply in relation to the additional items required by the foregoing provisions of this paragraph.
(7) In paragraph 18, for the reference to paragraphs 17 to 19 and 21 of Schedule 4 there shall be substituted a reference to paragraphs 31 to 33 and 36 of Part I of this Schedule.
(8) In paragraph 21—
(a) in sub-paragraph (1), for the reference to Schedule 4 there shall be substituted a reference to Part I of this Schedule; and
(b) for sub-paragraphs (2) and (3) there shall be substituted the following sub-paragraphs—
(2) In the Balance Sheet Format, Asset item C.II.3 (participating interests) shall be replaced by two items, “Interests in associated undertakings” and “Other participating interests”.
(3) In the Profit and Loss Account Format, items II.2(a) and III.3(a) (income from participating interests, with a separate indication of that derived from group undertakings) shall each be replaced by the following items—
(a) “Income from participating interests other than associated undertakings, with a separate indication of that derived from group undertakings”, which shall be shown as items II.2(a) and III.3(a), and
(b) “Income from associated undertakings”, which shall be shown as items II.2(aa) and III.3(aa).
(9) In paragraph 22(1), for the reference to paragraphs 17 to 19 and 21 of Schedule 4 there shall be substituted a reference to paragraphs 31 to 33 and 36 of Part I of this Schedule.
(1) Any item required in accordance with paragraph 1 above to be shown in a company’s balance sheet or profit and loss account may be shown in greater detail than so required.
(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 specifically covered by any of the items listed in the balance sheet or profit and loss account format set out in section B below, 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) Items to which Arabic numbers are assigned in the balance sheet format set out in section B below (except for items concerning technical provisions and the reinsurers' share of technical provisions), and items to which lower case letters in parentheses are assigned in the profit and loss account format so set out (except for items within items I.1 and 4 and II.1, 5 and 6) may be combined in a company’s accounts for any financial year if either —
(a) their individual amounts are not material for the purpose of giving a true and fair view; or
(b) the combination facilitates the assessment of the state of affairs or profit or loss of the company for that year;
but in a case within paragraph (b) above the individual amounts of any items so combined shall be disclosed in a note to the accounts and any notes required by this Schedule to the items so combined under that paragraph shall, notwithstanding the combination, be given.
(4) Subject to paragraph 3(3) below, 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.
(1) For the purposes of paragraph 1 above, Part I of this Schedule shall be modified as follows.
(2) The information required by paragraph 10 need not be given.
(3) In the case of general business, investment income, expenses and charges may be disclosed in the non-technical account rather than in the technical account.
(4) In the case of subsidiary undertakings which are not authorised to carry on long term business in Great Britain, notes (8) and (9) to the profit and loss account format shall have effect as if references to investment income, expenses and charges arising in the long term fund or to investments attributed to the long term fund were references to investment income, expenses and charges or (as the case may be) investments relating to long term business.
(5) In the case of subsidiary undertakings which do not have a head office in Great Britain, the computation required by paragraph 46 shall be made annually by an actuary or other specialist in the field on the basis of recognised actuarial methods.
(6) The information required by paragraphs 75 to 78 need not be shown.
(1) In respect of every item shown in the balance sheet or profit and loss account, there shall be shown or stated the corresponding amount for the financial year immediately preceding that to which the accounts relate.
(2) Where the 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 given in a note to the accounts.
(3) Paragraph 2(4) above 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 above for that item.
Subject to the provisions of this Schedule, 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.
Every profit and loss account of a company shall show separately as additional items —
(a) any amount set aside or proposed to be set aside to, or withdrawn or proposed to be withdrawn from, reserves; and
(b) the aggregate amount of any dividends paid and proposed.
The provisions of this Schedule which relate to long term business shall apply, with necessary modifications, to business within Classes 1 and 2 of Schedule 2 to the 1982 Act which —
(a) is transacted exclusively or principally according to the technical principles of long term business, and
(b) is a significant amount of the business of the company.
(1) References in this Part of this Schedule to the balance sheet format or profit and loss account format are to the balance sheet format or profit and loss account format set out below, and references to the items listed in either of the formats are to those items read together with any of the notes following the formats which apply to any of those items.
(2) The requirement imposed by paragraph 1 to show the items listed in either format in the order adopted in the format is subject to any provision in the notes following the format for alternative positions for any particular items.
(3) Where in respect of any item to which an Arabic number is assigned in either format, the gross amount and reinsurance amount or reinsurers' share are required to be shown, a sub-total of those amounts shall also be given.
(4) Where in respect of any item to which an Arabic number is assigned in the profit and loss account format, separate items are required to be shown, then a separate sub-total of those items shall also be given in addition to any sub-total required by sub-paragraph (3) above.
A number in brackets following any item in either of the formats set out below is a reference to the note of that number in the notes following the format.
In the profit and loss account format set out below—
(a) the heading “Technical account General business” is for business within the classes of insurance specified in Schedule 2 to the 1982 Act; and
(b) the heading “Technical account Long term business” is for business within the classes of insurance specified in Schedule 1 to that Act.
(1) Every balance sheet of a company which carries on long term business shall show separately as an additional item the aggregate of any amounts included in Liabilities item A (capital and reserves) which are required not to be treated as realised profits under section 268 of this Act.
(2) A company which carries on long term business shall show separately, in the balance sheet or in the notes to the accounts, the total amount of assets representing the long term fund valued in accordance with the provisions of this Schedule.
(1) For the purposes of this paragraph “managed funds” are funds of a group pension fund —
(a) which fall within Class VII of Schedule 1 to the 1982 Act, and
(b) which the company administers in its own name but on behalf of others, and
(c) to which it has legal title.
(2) The company shall, in any case where assets and liabilities arising in respect of managed funds fall to be treated as assets and liabilities of the company, adopt the following accounting treatment: assets and liabilities representing managed funds are to be included in the company’s balance sheet, with the notes to the accounts disclosing the total amount included with respect to such assets and liabilities in the balance sheet and showing the amount included under each relevant balance sheet item in respect of such assets or (as the case may be) liabilities.
The costs of acquiring insurance policies which are incurred during a financial year but which relate to a subsequent financial year shall be deferred in a manner specified in Note (17) on the balance sheet format.
Subject to paragraph 19 below, 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 14 to 18 below.
The company shall be presumed to be carrying on business as a going concern.
Accounting policies shall be applied consistently within the same accounts and from one financial year to the next.
The amount of any item shall be determined on a prudent basis, and in particular —
(a) subject to note (9) on the profit and loss account format, only profits realised at the balance sheet date shall be included in the profit and loss account; and
(b) all liabilities and losses which have arisen or are likely to arise in respect of the financial year to which the accounts relate or a previous financial year shall be taken into account, including those which only become apparent between the balance sheet date and the date on which it is signed on behalf of the board of directors in pursuance of section 233 of this Act.
All income and charges relating to the financial year to which the accounts relate shall be taken into account, without regard to the date of receipt or payment.
In determining the aggregate amount of any item the amount of each individual asset or liability that falls to be taken into account shall be determined separately.
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.
Subject 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”).
The same valuation method shall be applied to all investments included in any item in the balance sheet format which is denoted by an arabic number.
(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.
(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.
(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.
(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.
(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.
(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.
(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.
(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 from the revaluation reserve—
(a) to the profit and loss account, if the amount was previously charged to that account or represents realised profit, or
(b) on capitalisation;
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 sub-paragraph (3)(b) “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.
Subject to paragraphs 20 to 29 above, 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 31 to 41 below.
Subject to any provision for depreciation or diminution in value made in accordance with paragraph 32 or 33 below, the amount to be included in respect of any asset in the balance sheet format shall be its cost.
In the case of any asset included under Assets item B (intangible assets), C.I (land and buildings), F.I. (tangible assets) or F.II (stocks) which has a limited useful economic life, the amount of —
(a) its 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 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.
(1) This paragraph applies to any asset included under Assets item B (tangible assets), C (investments), F.I (tangible assets) or F.IV (own shares).
(2) Where an asset to which this paragraph applies 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.
(3) Provisions for diminution in value shall be made in respect of any asset to which this paragraph applies 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.
(4) 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.
(1) This paragraph applies to assets included under Assets items E.I., II. and III. (debtors) and F.III (cash at bank and in hand) in the balance sheet.
(2) If the net realisable value of an asset to which this paragraph applies is lower than its cost the amount to be included in respect of that asset shall be the net realisable value.
(3) Where the reasons for which any provision for diminution in value was made in accordance with sub-paragraph (2) have ceased to apply to any extent, that provision shall be written back to the extent that it is no longer necessary.
(1) Notwithstanding that amounts representing “development costs”may be included under Assets item B (intangible assets) in the balance sheet format, 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.
(1) The application of paragraphs 31 to 33 above 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) below, 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 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.
(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.
(1) Subject to the following sub-paragraph, assets which fall to be included under Assets item F.I.(tangible assets) in the balance sheet format 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.
The Companies Act 1985 (Insurance Companies Accounts) Regulations 1993 (legislation.gov.uk, OGL v3.0). Retrieved via LawPlayer, https://lawplayer.com/uk/act/uksi-1993-3246
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本頁資料來源：legislation.gov.uk (The National Archives)·整理提供：法律人 LawPlayer· lawplayer.com