Despite a relatively quiet year for major company law developments, there may be changes on the horizon. Kathryn Cearns and Isobel Hoyle detail the developments that have occurred, some issues that have arisen, and what’s in the pipeline (including some governance issues mainly affecting listed companies).
After the huge overhaul of company law by the Companies Act 2006, there have been relatively few major developments over the past year. There are, however, a number of areas being reviewed at present which may lead to changes in the future.
The Financial Reporting Council (FRC) has produced guidance1 on the true and fair view requirement which applies to UK company accounts and confirms that the requirement for accounts to be true and fair remains fundamental under both UK Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Standards (IFRS) (see Section 393 of the 2006 Act). The guidance aims to help those involved in the preparation of company accounts, and in their audit, to apply the true and fair requirement in practice. The guidance notes the opinion received from Martin Moore QC in 2008, which confirmed that the ‘fair presentation’ standard under IFRS is equivalent to a true and fair view.
The guidance also provides that:
The ICAEW has issued a new technical release ‘Guidance for directors on accounting records under the Companies Act 2006 (01/11)’2. Companies have an obligation to keep adequate accounting records under section 386 of the 2006 Act and failure to do so is an offence. The new guidance gives practical advice on how these requirements can be met, including:
This is an extract from the Finance & Management Magazine, Issue 192, October 2011.
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