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Financial and accounting definitions

Definitions relating to financial and accounting duties of directors.

A

accounting reference date

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accounting reference date

The accounting reference date of a company incorporated in Great Britain on or after 1st April 1996 and before the commencement of this Act, or after the commencement of this Act, is the last day of the month in which the anniversary of its incorporation falls ( CA 2006 , s.191).

accounting reference period

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accounting reference period

Accounting reference periods are usually successive periods of twelve months beginning immediately after the end of the previous accounting reference period and ending with its accounting reference date ( CA 2006 , s.391).

accounts meeting

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accounts meeting

The general meeting of the company before which the company's annual accounts for the financial year are to be laid.

AIM

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AIM

Alternative Investment Market of the London Stock Exchange

annual accounts

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annual accounts

Company's individual accounts for that year subject to the omission of the individual profit and loss account in certain cases ( CA 2006 , ss.394 and 408), and

any group accounts prepared by the company for that year ( CA 2006 , ss.398 and 399)

( CA 2006 , s.471(1))

annual accounts and reports

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annual accounts and reports

The annual accounts together with the directors' report, the auditor's report and, for quoted companies , the directors' remuneration report ( CA 2006 , s.471).

articles

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articles

Articles of Association

ASB

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ASB

Accounting Standards Board

associated body corporate

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associated body corporate

For the purposes of CA 2006 , Part 10:
bodies corporate are associated if one is a subsidiary of the other or both are subsidiaries of the same body corporate, and
companies are associated if one is a subsidiary of the other or both are subsidiaries of the same body corporate.
( CA 2006 , s.256) 

Note that this is different from the definition of an associate (or associated undertaking) for accounting purposes.

B

BERR

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BERR

Department for Business, Enterprise & Regulatory Reform

C

CDDA86

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CDDA86

Company Director Disqualification Act 1986

combined code

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combined code

The Combined Code on Corporate Governance (June 2008).

Companies Act accounts

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Companies Act accounts

Accounts prepared in accordance with the form and content requirements of regulations made under the 2006 Act , which includes compliance with accounting standards and related literature issued by the ASB (UK GAAP) by virtue of the analysis summarised at paragraph 85.

company associated with a public company

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company associated with a public company

A subsidiary or parent company of a public company, or a sister subsidiary of a public company (where both the company and the public company are subsidiaries of a third company).

Note that this is different from the definition of an associate (or associated undertaking) for accounting purposes.

D

DTI

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DTI

Department of Trade and Industry (since June 2007, replaced by the Department for Business, Enterprise & Regulatory Reform).

DTRs

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DTRs

Disclosure and Transparency Rules

E

entitled persons

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entitled persons

Shareholders, debenture holders and other persons entitled to receive notice of general meetings, including

any person nominated by a member under a power in the Articles ( CA 2006 , s.145) and

for traded companies , those persons that have been nominated

by registered shareholders to enjoy information rights, such as indirect investors whose investments are held through intermediaries ( CA 2006 , s.146) 

EU-adopted IFRS

 the international accounting standards, within the meaning of the IAS Regulation (including IFRS, IAS, IFRICs and SICs), adopted from time to time by the European Commission in accordance with that Regulation.

Exchange-regulated (or non-regulated) market

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Exchange-regulated (or non-regulated) market

A financial instruments market that is not a regulated market.

F

FRC

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FRC

Financial Reporting Council

FRRP

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FRRP

Financial Reporting Review Panel

FSA

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FSA

Financial Services Authority

FSA Handbook

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FSA Handbook

A publication issued by the FSA , which sets out all the rules and guidance made by the FSA under FSMA2000.

FSMA2000

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FSMA2000

Financial Services and Markets Act 2000

G

Group accounts

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Group accounts

Consolidated accounts comprising a consolidated balance sheet and a consolidated profit and loss account, in each case relating to the parent company and its subsidiary undertakings ( CA 2006 , s.404)

H

I

IA86

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IA86

Insolvency Act 1986

IAS accounts

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IAS accounts

Accounts prepared in accordance with EU-adopted IFRS

IAS Regulation

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IAS Regulation

EC Regulation 1606/2002 of the European Parliament and of the Council on the application of international accounting standards

IFRS

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IFRS

International Financial Reporting Standards

Individual accounts

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Individual accounts

The accounts that directors of every company are required prepare for the company for each of its financial years ( CA 2006 , s.394)

J

K

L

Large/Medium Companies Accounts Regulations 2008

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Large/Medium Companies Accounts Regulations 2008

The Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, SI 2008/410.

listed company

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listed company

A company with securities admitted to the Official List maintained by the FSA in accordance with section 74 of FSMA2000.

Listing Rules

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Listing Rules

The Listing Rules issued by the FSA

LSE

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LSE

London Stock Exchange

M

Memorandum

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Memorandum

Memorandum of Association

Model Code

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Model Code

The Model Code on directors' dealings in securities set out in LR 9 Annex 1 R

N

Non-regulated market

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Non-regulated market

See exchange-regulated market

O

official List

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official List

The Official List, maintained by the FSA , which comprises shares with a primary listing on the main market of the LSE , shares listed on the professional securities market and shares listed on the PLUS-listed market.

P

Parent company (or parent undertaking)

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Parent company (or parent undertaking)

An undertaking that, in relation to another undertaking (a 'subsidiary undertaking'):
holds a majority of the voting rights in the undertaking, or
is a member of the undertaking and has the right to appoint or remove a majority of its board of directors, or
has the right to exercise a dominant influence over the undertaking
by virtue of provisions contained in the undertaking's articles or
by virtue of a control contract, or
is a member of the undertaking and controls alone, pursuant to an agreement with other shareholders or members, a majority of the voting rights in the undertaking.
For these purposes an undertaking is treated as a member of another undertaking:
if any of its subsidiary undertakings is a member of that undertaking,

or

if any shares in that other undertaking are held by a person acting on behalf of the undertaking or any of its subsidiary undertakings.
An undertaking is also a parent undertaking in relation to another undertaking (a 'subsidiary undertaking'), if:


it has the power to exercise, or actually exercises, dominant influence or control over it, or
it and the subsidiary undertaking are managed on a unified basis.
A parent undertaking is treated as the parent undertaking of undertakings in relation to which any of its subsidiary undertakings are, or are to be treated as, parent undertakings; and references to its subsidiary undertakings are construed accordingly.

( CA 2006 , s.1162)
 

PLUS-listed market

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PLUS-listed market

The regulated market operated by PLUS Markets plc

PLUS-quoted market

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PLUS-quoted market

The non-regulated market operated by PLUS Markets plc.

prospectus rules

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prospectus rules

Rules issued by the FSA pursuant to FSMA2000

Q

quoted company

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quoted company

A company whose 'equity share capital' has been included in the Official List in accordance with the provisions of Part 6 of FSMA2000 (ie a primary listing on the LSE or a listing on the PLUS-listed market ), or is officially listed in an EEA State, or is admitted to dealing on either the New York Stock Exchange or the exchange known as Nasdaq (Companies Act 2006, section 385(2)). For these purposes, 'equity share capital' is defined in section 548 of the Act and differs from the definition in accounting standards.

R

regulated market

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regulated market

A multilateral system operated and/or managed by a market operator, which brings together or facilitates the bringing together of multiple third-party buying and selling interests in financial instruments in the system and in accordance with its non-discretionary rules in a way that results in a contract, in respect of the financial instruments admitted to trading under its rules and/or systems, and which is authorised and functions regularly and in accordance with Title III of the Markets in Financial Instruments Directive (MiFID) ( Article 4.1(14), MiFID , reproduced in the FSA Handbook ).

A list of regulated markets within the EEA is maintained on the website of the European Commission. UK regulated markets are listed on the websites of the Takeover Panel and the FSA . At the time of writing, UK regulated markets include the LSE , SWX Europe Ltd, EDX, LIFFE, London Metal Exchange, ICE Futures Europe and the PLUS-listed market

Revised Accounts Regulations 2008

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Revised Accounts Regulations 2008

The Companies (Revision of Defective Accounts and Reports) Regulations 2008, SI 2008/373.

S

SCR company

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SCR company

A company subject to the small companies regime.

senior statutory auditor

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senior statutory auditor

The individual identified by the firm as senior statutory auditor in relation to the audit in accordance with guidance issued by the FRC (see 'The Senior Statutory Auditor under the UK Companies Act 2006', APB Bulletin 2008/6).


The person identified as senior statutory auditor must be eligible for appointment as auditor of the company in question (see Chapter 2 of Part 42 of the 2006 Act).

Small Companies Accounts Regulations 2008

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Small Companies Accounts Regulations 2008

The Small Companies and Groups (Accounts and Directors' Report) Regulations 2008, SI 2008/409.

special notice

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special notice

Notice of a resolution that must be given by the proposer to the company at least 28 days before the meeting at which the resolution is to be moved. The company must then, where practicable, give its members notice of any such resolution in the same manner and at the same time as it gives notice of the meeting. ( CA 2006 , s.312).

subsidiary undertaking

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subsidiary undertaking

See parent company definition above.

Summary Financial Statement Regulations 2008

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Summary Financial Statement Regulations 2008

The Companies (Summary Financial Statement) Regulations 2008, SI 2008/374.

T

the 1985 Act

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the 1985 Act

the Companies Act 1985

the 2004 Act

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the 2004 Act

The Companies (Audit, Investigation and Community Enterprise) Act 2004.

the 2006 Act, CA 2006 or the Act

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the 2006 Act, CA 2006 or the Act

the Companies Act 2006

Table A

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Table A

Table A as set out in the Companies (Tables A�F) Regulations 1985

Table E

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Table E

Table E as set out in the Companies (Tables A-F) Regulations 1985

takeover code

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takeover code

The City Code on Takeovers and Mergers

takeover directive

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takeover directive

EC Directive on Takeover Bids (2004/25/EC).

traded company

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traded company

A public company whose shares are admitted to trading on at least one regulated market

Transparency Obligations Directive

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Transparency Obligations Directive

Directive 2004/109/EC of The European Parliament And Of The Council of 15 December 2004 on the harmonisation of transparency requirements in relation to information about issuers whose securities are admitted to trading on a regulated market and amending Directive 2001/34/EC.

U

V-Z

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