Technical helpsheet to help ICAEW members understand the disclosure requirements for companies with regard to their subsidiaries, associates, joint ventures, parents and controlling parties. This helpsheet explores the requirements for small companies preparing their accounts under FRS 102 Section 1A, as well as medium or large companies preparing their accounts under full FRS 102.
Introduction
This helpsheet has been issued by ICAEW’s Technical Advisory Service to help ICAEW members understand the disclosure requirements for companies with regard to their subsidiaries, associates, joint ventures, parents and controlling parties. This helpsheet explores the requirements for small companies preparing their accounts under FRS 102 Section 1A, as well as medium or large companies preparing their accounts under full FRS 102.
Members may also wish to refer to the following related helpsheet:
Disclosure requirements
The disclosure requirements for subsidiaries, associates, joint ventures, parent entities and controlling parties come from both accounting standards and legislation. In the case of small companies, the disclosure requirements come from FRS 102 Section 1A and SI 2008/409 The Small Companies and Groups (Accounts and Directors’ Report) Regulations 2008. In the case of medium or large companies, such disclosure requirements come from FRS 102 and SI 2008/410 The Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008.
Whilst this helpsheet highlights the key disclosure requirements, it is no substitute for a comprehensive disclosure checklist.
Requirement for true and fair accounts
Even where there is no specific disclosure requirement, both FRS 102 and FRS 102 1A accounts are required to give a true and fair view and therefore consideration should be given as to whether disclosure is required to achieve this.
Disclosure of parent entities and controlling parties
Disclosure requirements |
Small company under FRS 102 1A |
Medium or large company under full FRS 102 |
|---|---|---|
The name of the ultimate controlling party |
- |
√ |
The name of its parent. |
- |
√ |
The name of the ultimate controlling company (if any) and its country of incorporation (if outside the UK). For this purpose, ‘company’ includes any body corporate. |
- |
√ |
Where the company is itself a subsidiary and has a parent which draws up consolidated financial statements:
* Where such consolidated accounts are available to the public, the address from which copies can be obtained must also be stated. |
√ - |
√* √* |
Disclosure of subsidiaries
Disclosure requirements |
Small company under FRS 102 1A |
Medium or large company under full FRS 102 |
|---|---|---|
The name and registered office (or, if unincorporated, the principal place of business) for each subsidiary undertaking. |
-** |
√ |
Identity and proportion of the nominal value of each class of shares held, distinguishing between those held by the parent and the group. |
-** |
√ |
In the parent’s own financial statements, a description of the methods used to account for investments in subsidiaries. |
- |
√ |
If the company is required to prepare consolidated accounts, the company must disclose, for each subsidiary, whether it is included in the consolidation and, if not, the reasons for excluding it. |
-** |
√ |
Where consolidated accounts are prepared, additional disclosures required by Section 9. |
- |
√ |
* Although there are a number of disclosure requirements not mandated for companies complying with FRS 102 1A, care must be taken in ensuring the accounts are true and fair. Therefore, it may be considered necessary to include non-mandatory disclosure, as set out in FRS 102 paragraph 1A.16. ** This information is required by SI 2008/409 Schedule 6 Part 2, if the small company voluntarily prepares consolidated accounts. |
Associates
Where a medium or large company under FRS 102 has investments in associates, the disclosure requirements are set out in FRS 102 paragraphs 14.12-14.15A and those required by law are set out in SI 2008/410 Schedule 4.
If a small company prepares their accounts under FRS 102 paragraph 1A and has investments in associates, the accounting policy for investments in associates must be disclosed under FRS 102 paragraph 1AC.3. As noted above, additional disclosures may be needed to achieve a true and fair view. Note, that where the small company voluntarily produces consolidated accounts, mandatory disclosure requirements in relation to associates are contained within SI 2008/409 Schedule 6.
Joint ventures
Where a medium or large company under FRS 102 has investments in joint ventures, the disclosure requirements are set out in FRS 102 paragraphs 15.19-15.21A and those required by law are set out in Schedule 4 to SI 2008/410.
If a small company prepares their accounts under FRS 102 paragraph 1A and has investments in joint ventures, the accounting policy for investments in joint ventures must be disclosed in accordance with FRS 102 paragraph 1AC.3. Additional disclosures may be needed to achieve a true and fair view. Note, that where the small company voluntarily produces consolidated accounts, additional disclosure requirements for investments in joint ventures are contained within SI 2008/409 Schedule 6.
If in doubt seek advice
ICAEW members, affiliates, ICAEW students and staff in eligible firms with member firm access can discuss their specific situation with the Technical Advisory Service on +44 (0)1908 248 250 or via webchat.
© ICAEW 2024 All rights reserved.
ICAEW cannot accept responsibility for any person acting or refraining to act as a result of any material contained in this helpsheet. This helpsheet is designed to alert members to an important issue of general application. It is not intended to be a definitive statement covering all aspects but is a brief comment on a specific point.
ICAEW members have permission to use and reproduce this helpsheet on the following conditions:
- This permission is strictly limited to ICAEW members only who are using the helpsheet for guidance only.
- The helpsheet is to be reproduced for personal, non-commercial use only and is not for re-distribution.
For further details members are invited to telephone the Technical Advisory Service T +44 (0)1908 248250. The Technical Advisory Service comprises the technical enquiries, ethics advice, anti-money laundering and fraud helplines. For further details visit icaew.com/tas.
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Update History
- 01 Dec 2015 (12: 00 AM GMT)
- First published.
- 22 Oct 2021 (03: 30 PM BST)
- Changelog created, helpsheet converted to new template
- 22 Oct 2021 (03: 31 PM BST)
- Helpsheet reviewed, no changes to content.
- 13 Jun 2022 (12: 00 AM BST)
- Helpsheet reinstated after review. The helpsheet was originally archived in April 2022.
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