Accountancy: Standards

Department for Business, Energy and Industrial Strategy written question – answered on 21st July 2022.

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Photo of Baroness Bowles of Berkhamsted Baroness Bowles of Berkhamsted Liberal Democrat

To ask Her Majesty's Government, further to the Written Answer by Lord Callanan on 15 June (HL757), whether the use of judgement in resolving accounting issues is by reference to (1) the purpose of audited accounts as set out in company law, or (2) the Conceptual Framework that has “no status because it is not adopted into UK law”.

Photo of Lord Callanan Lord Callanan Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy)

Section 393 of the Companies Act 2006 places a requirement on directors that the accounts must provide a true and fair view of the assets, liabilities, financial position and profit or loss of a company or group. Directors must provide such information as is necessary to ensure that this requirement is met, including where no specific accounting standard applies to a transaction, event or condition. For those companies using “UK-adopted international accounting standards”, IAS 8 “Accounting Policies, Changes in Accounting Estimates and Errors” provides a basis for the use of judgement in resolving accounting issues in such situations.

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