Groups and group accounts
Article Abstract:
The UK Companies Act of 1989 implements the European Community's Seventh Directive by changing company law's definition of a group and the requirements of group accounts. The Act alters the definition of a group by replacing the terms "holding company" and "subsidiary" with two sets of definitions, introducing the general terms "parent undertaking" and "subsidiary undertaking" for accounting purposes. A parent company must consolidate all its subsidiary undertakings for accounting purposes. The Act substitutes the term "participating interests" for extant references to "shares in related companies" and introduces the term "associated undertaking" for an interest over which a group exercises influence and which must be included in consolidated accounts. Company/subsidiary relationships are no longer created by majority ownership but by the exertion of dominant influence by a company over another company.
Publication Name: The Accountant's Magazine
Subject: Business
ISSN: 0001-4761
Year: 1990
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Consolidated accounts: preparation, exemptions and disclosure
Article Abstract:
The UK Companies Act 1989 revised the meaning of the word group and the requirements of group accounts. Group accounts must be in consolidated form and parent companies are required to consolidate the accounts of subsidiary undertakings, with certain exceptions. Companies other than entities are not required to prepare consolidated accounts. Small- and medium-sized groups are exempted if they satisfy two of three criteria based on balance sheet total, number of employees, and turnover. Subsidiaries may be excluded from consolidation if the subsidiary is being held solely for sale or if there are long-term restrictions on the parent company's rights. In addition, the Companies Act 1989 revises the exemptions for dissimilar activities and disproportionate expenses.
Publication Name: The Accountant's Magazine
Subject: Business
ISSN: 0001-4761
Year: 1990
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Summary financial statements, private companies and auditors
Article Abstract:
The UK Companies Act of 1989, which goes into affect 1 Apr 90, will allow companies to send summary financial statements (SFSs) to shareholders not interested in receiving full accounts. SFSs must include a summarized profit and loss account and balance sheet, a business review, a list of important post balance sheet events and likely future developments, and a list of the directors. In addition, the SFS must carry an auditor's report on whether the SFS is consistent with the firm's full accounts. The SFS must state whether the full accounts contain a qualified audit report and qualifications must be reproduced in full.
Publication Name: The Accountant's Magazine
Subject: Business
ISSN: 0001-4761
Year: 1990
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