To ask Her Majesty's Government whether the numerical outcomes that the International Standards Board seeks to achieve from accounts prepared using its accounting standards system are the same as those numerical outcomes for accounts (1) set out in section 836 of the Companies Act 2006 in respect of assets, liabilities, financial position and profit or loss, and (2) for the capital maintenance purpose set out in Part 23 of the Companies Act 2006; and if they are not the same numerical outcomes, (a) what such outcomes are being sought, (b) what was the basis for deciding those outcomes, (c) when was that decided, and (d) by whom.
The Companies Act 2006, Part 15, requires that company accounts must be prepared in accordance with accounting standards, with the overriding requirement that they must give a true and fair view of the company’s finances. The directors also have a legal duty to ensure that the requirements on capital maintenance and distributable profits in Part 23 of the Companies Act 2006 are followed. Although the calculation of the distributable profits and of a distribution by a public company must be based on the profits of the company as set out in the company’s accounts, it must take into account additional factors set out in Part 23, such as those set out in s841 in relation to realised losses and profits. The effect of these additional factors is to ensure that a company may only make distributions out of profits available for the purpose, as set out in s830.
All requirements set out above arise from the Companies Act 2006.