Source: http://revisedacts.lawreform.ie/eli/2014/act/38/schedule/3/revised/en/html
Timestamp: 2020-04-03 16:33:14
Document Index: 800709977

Matched Legal Cases: ['art. 3', 'art. 4', 'art 6', 'art 6', 'art.\n2', 'art 42']

F605 [ SCHEDULE 3
ACCOUNTING PRINCIPLES, FORM AND CONTENT OF ENTITY FINANCIAL STATEMENTS ]
Substituted (9.06.2017) by Companies (Accounting) Act 2017 (9/2017), s. 89 and sch. 1, S.I. No. 246 of 2017, art. 3, subject to transitional provision in art. 4.
References construed (1.01.2020) by European Union (Qualifying Partnerships: Accounting and Auditing) Regulations 2019 (S.I. No. 597 of 2019), reg. 8(6), in effect as per reg. 1(2), (3).
Interpretation of terms in Part 6 of Principal Act
(6) A reference in Part 6 and Schedules 3, 3A, 3B, 4 and 4A of the Principal Act to shares or share capital shall, in relation to a qualifying partnership, be construed in accordance with section 275(3) of the Principal Act.
F605 [ PART I
CONSTRUCTION OF REFERENCES TO PROVISIONS OF SCHEDULES ]
F605 [ 1. (1) Without prejudice to the generality of section 9 of the Interpretation Act 2005 and its application to the body of this Act and to Schedules 1, 2 and 5 to 18 —
(a) a reference in this Schedule to a paragraph or Part is a reference to a paragraph or Part of this Schedule, unless it is indicated that a reference to some other enactment is intended,
(b) a reference in this Schedule to a section is a reference to the section of the Part in which the reference occurs, unless it is indicated that a reference to some other enactment is intended, and
(2) Provisions providing for the interpretation of certain expressions appearing in this Schedule are contained in Part VI . ]
F605 [ PART II
GENERAL RULES AND FORMATS ]
F605 [ SECTION A
2. (1) Subject to the provisions of this Schedule —
(a) every balance sheet of a company shall show the items listed in either of the balance sheet formats set out in Section B , and
(b) every profit and loss account of a company shall show the items listed in either of the profit and loss accounts formats so set out,
(2) Notwithstanding subparagraph (1)(a) , in preparing the balance sheet of a company, the directors of the company may adapt one of the balance sheet formats in Section B so as to distinguish between current and non-current items in a different way, provided that —
(a) the information given is at least equivalent to that which would have been required by the use of such format had it not been thus adapted, and
(b) the presentation of those items is in accordance with generally accepted accounting principles or practice.
(3) Notwithstanding subparagraph (1)(b) , the directors of the company may prepare a statement of the performance of the company instead of a profit and loss account and in doing so may adapt one of the profit and loss account formats in Section B , provided that —
(4) Subparagraph (1) shall not be read as requiring the heading or sub-heading for any item in the balance sheet, or profit and loss account, of a company to be distinguished by any letter or number assigned to that item in the formats set out in Section B .
(5) So far as is practicable, the following provisions of this section shall apply to the balance sheet and profit and loss account of a company notwithstanding any adaptation pursuant to subparagraphs (2) and (3) .
3. (1) Where, in accordance with paragraph 2(1) , a company ’ s balance sheet or profit and loss account for any financial year has been prepared by reference to one of the formats set out in Section B or where, in accordance with paragraph 2(2) or 2(3) one of the formats has been adapted, the directors of the company shall adopt the same format in preparing the financial statements for subsequent financial years unless, in their opinion, there are special reasons for a change.
(2) Where any change is made in the format adopted in preparing a balance sheet or profit and loss account of a company, the reasons for the change, together with full particulars of the change, shall be given in a note to the financial statements in which the new format is first adopted.
4. (1) Any item required in accordance with paragraph 2 to be shown in the balance sheet or profit and loss account of a company may be shown in greater detail than that required by the format adopted.
(2) The balance sheet, or profit and loss account, of a company may include an item representing or covering the amount of any asset or liability or income or expenditure not otherwise covered by any of the items listed in the format adopted but the following shall not be treated as assets in the balance sheet of a company —
(a) preliminary expenses,
(b) expenses of and commission on any issue of shares or debentures, and
(3) The balance sheet, or profit and loss account, of a company may include subtotals where their inclusion facilitates the assessment of the financial position or profit or loss of the company for the financial year concerned.
(4) Any items to which an Arabic number is assigned in any of the formats set out in Section B may be combined in the financial statements of a company —
(a) in any case where the individual amounts of such items are not material to assessing the financial position or profit or loss of the company for the financial year concerned, or
(5) Where items are combined in a company ’ s financial statements pursuant to subparagraph (4)(b) , the individual amounts of any items so combined shall be disclosed in a note to the financial statements.
(6) In preparing the balance sheet, or profit and loss account, of a company, the directors of the company shall adapt the arrangement and headings and sub-headings otherwise required by paragraph 2 in respect of items to which an Arabic number is assigned in the format adopted, in any case where the special nature of the company ’ s business requires such adaptation.
(7) Where an asset or liability relates to more than one of the items listed in either of the balance sheet formats set out in Section B , its relationship to other items shall be disclosed either under the item where it is shown or in the notes to the financial statements.
(8) The opening balance sheet for each financial year shall correspond to the closing balance sheet for the preceding financial year.
5. (1) Subject to subparagraph (2) , in respect of every item shown in the balance sheet, or profit and loss account, or notes thereto, of a company, the corresponding amount for the financial year immediately preceding that to which the balance sheet or profit and loss account relates shall also be shown and, if that corresponding amount is not comparable with the amount to be shown for the item in question in respect of the financial year to which the balance sheet or profit and loss account relates, the former amount may be adjusted, and particulars of the adjustment and the reasons therefor shall be given in a note to the financial statements.
(2) Corresponding amounts are not required for the movements in fixed assets during the year required by paragraph 46(1) and (3) or the movements in provisions required by paragraph 54(1) and (2) .
6. (1) Subject to subparagraph (2) , a heading or sub-heading corresponding to an item listed in the format adopted in preparing the balance sheet or profit and loss account of a company shall not be included in the balance sheet or profit and loss account, as the case may be, if there is no amount to be shown for that item in respect of the financial year to which the balance sheet or profit and loss account relates.
(2) Subparagraph (1) shall not apply in any case where an amount can be shown for the item in question in respect of the financial year immediately preceding that to which the balance sheet or profit and loss account relates, and that amount shall be shown under the heading or sub-heading required by the format adopted as aforesaid.
7. (1) Subject to subparagraph (2) , amounts in respect of items representing assets or income may not be set off in the financial statements of a company against amounts in respect of items representing liabilities or expenditure, as the case may be, or vice versa .
(2) Subparagraph (1) shall not apply in any case where such set off is in accordance with applicable accounting standards, provided that the gross amounts are disclosed in a note to the financial statements.
8. References in this Part to the items listed in any of the formats set out in this Part are references to those items read together with any notes following the formats which apply to any of those items.
9. A number in brackets following any item in, or any heading to, any of the formats set out in this Part is a reference to the note of that number in the notes following the formats.
10. In the notes following the formats —
(a) the heading of each note gives the required heading or sub- heading for the item to which it applies and a reference to any letters and numbers assigned to that item in the formats set out in this Part, and
(b) references to a numbered format are references to the balance sheet format or (as the case may require) to the profit and loss account format of that number set out in this Part.
2. Land and buildings
4. Fixtures, fittings, tools and equipment
5. Payments on account and assets in course of construction
4. Loans to undertakings with which the company is linked by virtue of participating interests
II. Debtors (3)
3. Amounts owed by undertakings with which the company is linked by virtue of participating interests
5. Called-up share capital not paid
7. Accrued income
C. Creditors: Amounts falling due within one year
1. Debenture loans (4)
3. Called-up share capital presented as a liability (8)
4. Payments received on account (5)
6. Bills of exchange payable
7. Amounts owed to group undertakings
8. Amounts owed to undertakings with which the company is linked by virtue of participating interests
9. Other creditors including tax and social insurance (6)
10. Accruals
11. Deferred income (7)
D. Net current assets (liabilities)
E. Total assets less current liabilities
F. Creditors: Amounts falling due after more than one year
G. Provisions for liabilities
1. Retirement benefit and similar obligations
3. Other provisions for liabilities
H. Capital and reserves
I. Called-up share capital presented as equity (8)
1. Other undenominated capital
2. Reserve for own shares held
3. Reserves provided for by the constitution
4. Other reserves including the fair value reserve (specified as necessary)
V. Profit or loss brought forward (10)
VI. Profit or loss for the financial year (10).
4. Other reserves including the fair value reserve (specify as necessary)
VI. Profit or loss for the financial year (10)
B. Provisions for liabilities
C. Creditors (9)
(1) Concessions, patents, licences, trade marks and similar rights and assets (Formats 1 and 2, items A. I. 2)
Amounts in respect of assets shall only be included in a company ’ s balance sheet under this item if either —
(b) the assets in question were created by the company itself.
( Formats 1 and 2 , items A. I. 3 )
(3) Debtors
( Formats 1 and 2 , items B. II. 1 to 7 )
The amount falling due after more than one year shall be shown separately for each item included under debtors.
(4) Debenture loans
( Format 1, item C. 1 and F. 1 and Format 2, item C.1 )
The amount of any convertible loans shall be shown separately and the terms and conditions under which those loans are convertible into share capital shall be disclosed in the notes to the financial statements.
(5) Payments received on account
( Format 1, items C. 4 and F. 4 and Format 2, item C.4 )
Payments received on account of orders shall be shown for each of these items in so far as they are not shown as deductions from stocks.
(6) Other creditors including tax and social insurance
( Format 1, items C. 9 and F. 9 and Format 2, item C.9 )
The amount for creditors in respect of taxation and social insurance shall be shown separately from the amount for other creditors and in respect of taxation there shall be stated separately the amounts included in respect of income tax payable on emoluments to which Chapter 4 of Part 42 of the Taxes Consolidation Act 1997 applies, any other income tax, corporation tax, capital gains tax, value-added tax and any other tax.
(7) Deferred income
( Format 1, items C. 11 and F. 11 and Format 2, items C.11 )
The amount in respect of Government grants, that is to say, grants made by or on behalf of the Government, included in this item shall be shown separately in a note to the financial statements unless it is shown separately in the balance sheet.
(8) Called-up share capital
( Format 1, item C. 3, F. 3 and H. I, and Format 2, 'CAPITAL, RESERVES AND LIABILITIES' items A. I and C. 3 )
In accordance with the accounting principle in paragraph 17 , called-up share capital shall be analysed between shares that are presented as liabilities and share capital.
(9) Creditors
( Format 2, items C. 1 to 11 )
Amounts falling due within one year and after one year shall be shown separately for each of these items and their aggregate shall be shown separately for all of these items.
(10) Profit and loss account
( Format 1, items H.V and VI , Format 2, 'CAPITAL, RESERVES AND LIABILITIES' items A.V and V.I )
These items may be combined where the appropriation of profit required by paragraph 53 is given at the foot of the profit and loss account or in a note to the financial statements.
Format 1 (15)
9. Income from other financial assets (12)
11. Value adjustments in respect of financial assets and investments held as current assets
12. Interest payable and similar expenses (13)
13. Tax on profit or loss
14. Profit or loss after taxation
15. Other taxes not shown under the above items
16. Profit or loss for the financial year (14)
2. Variation in stocks of finished goods and in work in progress
5. (a) Raw materials and consumables
(b) Other external expenses
(b) Social insurance costs
(c) Other retirement benefit costs
(d) Other compensation costs
7. (a) Depreciation and other value adjustments in respect of tangible and intangible fixed assets
(b) Value adjustments in respect of current assets to the extent they exceed value adjustments that are normal in the undertaking concerned
11. Income from other financial assets (12)
13. Value adjustments in respect of financial assets and investments held as current assets
14. Interest payable and similar expenses (13)
15. Tax on profit or loss
16. Profit or loss after taxation
17. Other taxes not shown under the above items
18. Profit or loss for the financial year (14)
(11) Cost of sales: Distribution costs: Administrative expenses
( Format 1, items 2, 4 and 5 )
These items shall be stated after taking into account any necessary value adjustments for depreciation or diminution in value of assets.
(12) Income from other financial assets: other interest receivable and similar income
( Format 1, items 9 and 10 ; Format 2, items 11 and 12 )
(13) Interest payable and similar expenses
( Format 1, item 12 ; Format 2, item 14 )
(14) Profit or loss for the financial year
( Format 1, item 16 ; Format 2, item 18 )
The appropriation of profit required by paragraph 53 may be given at the foot of the profit and loss account or in a note to the financial statements.
(15) Format 1
The amounts of any value adjustments for depreciation and diminution in value of tangible and intangible fixed assets falling to be shown under item 7(a) in Format 2 shall be disclosed in a note to the financial statements in any case where the profit and loss account is prepared by reference to Format 1. ]
F605 [ PART III
ACCOUNTING PRINCIPLES AND VALUATION RULES ]
11. Subject to paragraph 18 , the amounts to be included in the financial statements of a company in respect of the items shown shall be determined in accordance with the principles set out in paragraphs 12 to 17 .
12. The company shall be presumed to be carrying on business as a going concern.
13. Accounting policies and measurement bases shall be applied consistently from one financial year to the next.
14. The amount of any item in the financial statements shall be determined on a prudent basis and in particular —
(a) only profits realised at the financial year end date shall be included in the profit and loss account,
(b) all liabilities which have arisen in the course of the financial year to which the financial statements relate or of a previous financial year shall be taken into account, even if such liabilities only become apparent between the financial year end date and the date on which the financial statements are signed under section 324 , and
(c) all value adjustments for diminution in value shall be recognised, whether the result for the financial year to which the financial statements relate is a profit or loss.
15. All income and expenses relating to the financial year to which the financial statements relate shall be taken into account without regard to the date of receipt or payment.
16. In determining the aggregate amount of any item the amount of each individual asset or liability that falls to be taken into account shall be determined separately.
17. Items in the profit and loss account and balance sheet shall be accounted for and presented having regard to the substance of the reported transaction or arrangement in accordance with applicable accounting standards.
18. The provisions of this Schedule need not be complied with where the amounts involved are not material for the purpose of giving a true and fair view.
19. If it appears to the directors of a company that there are special reasons for departing from any of the principles stated above in preparing the company ’ s financial statements in any particular year, they may so depart, but particulars of the departure, the reasons for it and its effect on the balance sheet and profit and loss account of the company shall be stated in a note to the financial statements.
20. Subject to sections C and D , the amounts to be included in respect of all items shown in a company ’ s financial statements shall be determined in accordance with the rules set out in paragraphs 21 to 30 .
21. Subject to any value adjustment for depreciation or diminution in value made in accordance with paragraph 22 or 23 the amount to be included in respect of any fixed asset shall be its purchase price or production cost.
22. In the case of any fixed asset which has a limited useful economic life, the amount of —
(b) where it is estimated that any such asset will have a residual value at the end of the period of its useful economic life, its purchase price or production cost less that estimated residual value,
shall be reduced by value adjustments for depreciation calculated to write off that amount systematically over the period of the asset ’ s useful economic life.
23. (1) Where a financial asset of a description falling to be included under item A. III of either of the balance sheet formats set out in Part II has diminished in value, value adjustments for diminution in value may be made in respect of it and the amount to be included in respect of it may be reduced accordingly; and any such value adjustments which are not shown separately in the profit and loss account shall be disclosed (either separately or in aggregate) in a note to the financial statements.
(2) Value adjustments for diminution in value shall be made in respect of any fixed asset which has diminished in value if the reduction in its value is expected to be permanent (whether its useful economic life is limited or not) and the amount to be included in respect of it shall be reduced accordingly; and any such value adjustments which are not shown separately in the profit and loss account shall be disclosed (either separately or in aggregate) in a note to the financial statements.
(3) Where the reasons for which any value adjustment was made in accordance with subparagraphs (1) or (2) have ceased to apply to any extent, that value adjustment shall be written back to the extent that it is no longer necessary; and any amounts written back in accordance with this subparagraph which are not shown in the profit and loss account shall be disclosed (either separately or in aggregate) in a note to the financial statements.
24. (1) Notwithstanding that an item in respect of 'development costs' is included under 'fixed assets' in the balance sheet formats set out in Part II , an amount may only be included in a company ’ s balance sheet in respect of that item in special circumstances.
(2) If an amount is included in a company ’ s balance sheet in respect of development costs, the following information shall be given in a note to the financial statements —
25. (1) The application of paragraphs 21 to 24 in relation to goodwill and development costs (in any case where goodwill or development costs are treated as assets) and other intangible assets is subject to the following provisions of this paragraph.
(2) Subject to subparagraph (3) —
(a) the amount of the consideration for any goodwill acquired by a company,
(b) the amount of development costs capitalised, or
(c) the amount of other intangible assets recognised,
shall be reduced by value adjustments for depreciation calculated to write off that amount systematically over the useful economic life of the goodwill, development costs or other intangible assets.
(3) Where, in exceptional circumstances, the useful life of goodwill acquired by a company or development costs or other intangible assets capitalised cannot be reliably estimated, the amounts referred to in subparagraphs (2) (a) , (b) and (c) shall be reduced by value adjustments for depreciation calculated to write off those amounts systematically over a period which shall be not more than 10 years.
(4) In any case where any goodwill acquired by a company is shown or included as an asset in the company ’ s balance sheet, the period chosen for writing off the consideration for that goodwill and the reasons for choosing that period shall be disclosed in a note to the financial statements.
(5) Where, in accordance with paragraph 23(2) , a value adjustment for diminution in value has been recognised for goodwill, even if it is considered that the reason for the diminution in value has ceased to exist, the value adjustment shall not be reversed as required by paragraph 23(3) .
26. Subject to paragraph 27 , the amount to be included in respect of any current asset shall be its purchase price or production cost.
27. (1) If the net realisable value of any current asset is lower than its purchase price or production cost, the amount to be included in respect of that asset shall be the net realisable value.
(2) Where the reasons for which any value adjustment for diminution in value was made under subparagraph (1) have ceased to apply to any extent that value adjustment shall be written back to the extent that it is no longer necessary.
28. (1) Where the amount repayable on any debt owed by a company is greater than the value of the consideration received in the transaction giving rise to the debt, the amount of the difference may be treated as an asset.
(2) Where any such amount exists —
(b) if the amount not written off is not shown as a separate item in the company ’ s balance sheet, it shall be disclosed in a note to the financial statements.
29. (1) The purchase price of an asset shall be determined by adding to the actual price paid any expenses incidental to its acquisition and by deducting from the actual price paid any income incidental to its acquisition.
(2) The production cost of an asset shall be determined by adding to the purchase price of the raw materials and consumables used the amount of the costs incurred by the company which are directly attributable to the production of that asset.
(3) In addition there may be included in the production cost of an asset —
(a) a reasonable proportion of the costs incurred by the company which are only indirectly attributable to the production of that asset, but only to the extent that they relate to the period of production, and
(b) interest on capital borrowed to finance the production of that asset, to the extent that it accrues in respect of the period of production,
provided, however, in a case within clause (b) , that the inclusion of the interest in determining the cost of that asset and the amount of the interest so included is disclosed in a note to the financial statements.
(4) Distribution costs may not be included in production costs.
30. (1) Subject to the qualification mentioned in subparagraph (2) , the purchase price or production cost of —
(a) any assets which fall to be included under any item shown in a company ’ s balance sheet under the general item 'stocks', and
(b) any assets which are fungible assets (including investments),
may be determined by the application of any of the methods mentioned in subparagraph (3) in relation to any such assets of the same class.
(2) The method chosen shall be one which appears to the directors to be appropriate in the circumstances of the company.
(3) The methods are —
(a) the method known as 'first in, first out' (FIFO),
(b) a weighted average price, and
(c) any other method reflecting generally accepted best practice.
(4) For the purpose of this paragraph, assets of any description shall be regarded as fungible if assets of that description are substantially indistinguishable from one another.
31. (1) The rules set out in section B are referred to subsequently in this Schedule as the historical cost accounting rules.
(2) Those rules, with the omission of paragraphs 20, 29 and 30 , are referred to subsequently in this Part as the depreciation rules; and references subsequently in this Schedule to the historical cost accounting rules do not include the depreciation rules as they apply by virtue of paragraph 34 .
32. Subject to paragraphs 34 to 37 , the amounts to be included in respect of assets of any description mentioned in paragraph 33 may be determined on any basis so mentioned.
33. (1) Intangible fixed assets, other than goodwill, may be included at a market value determined as at the date of their last valuation.
(2) Tangible fixed assets may be included at a market value determined as at the date of their last valuation.
(3) Financial fixed assets may be included either —
(a) at a market value determined as at the date of their last valuation, or
(b) at a value determined on any basis which appears to the directors to be appropriate in the circumstances of the company,
but in the latter case particulars of the method of valuation adopted and of the reasons for adopting it shall be disclosed in a note to the financial statements.
(4) Participating interests in an associated undertaking may be included under the equity method of accounting.
34. (1) Where the value of any asset of a company is determined on any basis mentioned in paragraph 33 , that value shall be, or (as the case may require) be the starting point for determining, the amount to be included in respect of that asset in the company ’ s financial statements, instead of its purchase price or production cost or any value previously so determined for that asset; and the depreciation rules shall apply accordingly in relation to any such asset with the substitution for any reference to its purchase price or production cost of a reference to the value most recently determined for that asset on any basis mentioned in paragraph 33 .
(2) The amount of any value adjustment for depreciation required in the case of any fixed asset by paragraph 22 or 23 as it applies by virtue of subparagraph (1) is referred to subsequently in this paragraph as the adjusted amount; and the amount of any value adjustment which would be required by that paragraph in the case of that asset according to the historical cost accounting rules is referred to as the historical cost amount.
(3) Where subparagraph (1) applies in the case of any fixed asset, the amount of any value adjustment for depreciation in respect of that asset —
(a) included in any item shown in the profit and loss account in respect of amounts written off assets of the description in question, or
(b) taken into account in stating any item so shown which is required by note (11) of the notes on the profit and loss account formats set out in Part II to be stated after taking into account any necessary value adjustments for depreciation or diminution in value of assets included under it,
may be the historical cost amount instead of the adjusted amount, provided that, if the amount of the value adjustment for depreciation is the historical cost amount, the amount of any difference between the two shall be shown separately in the profit and loss account or in a note to the financial statements.
35. (1) This paragraph applies where the amounts to be included in respect of fixed assets covered by any items shown in a company ’ s financial statements have been determined on any basis mentioned in paragraph 33 .
(2) The items affected and the basis of valuation adopted in determining the amounts of the assets in question in the case of each such item shall be disclosed in the notes to the financial statements on the accounting policies adopted by the company as required by section 321 .
(3) In the case of each balance sheet item affected, the comparable amounts determined according to the historical cost accounting rules shall be shown separately in the balance sheet or in a note to the financial statements.
(4) In subparagraph (3) , references in relation to any item to the comparable amounts determined as there mentioned are references to —
(b) the aggregate amount of the cumulative value adjustments for depreciation or diminution in value which would be permitted or required in determining those amounts according to those rules.
36. (1) With respect to any determination of the value of an asset of a company on any basis mentioned in paragraph 33(1) to (3) , the amount of any profit or loss arising from that determination (after allowing, where appropriate, for any value adjustments for depreciation or diminution in value made otherwise than by reference to the value so determined and any adjustments of any such value adjustments made in the light of that determination) shall be credited or, as the case may be, debited to a separate reserve (referred to in this paragraph as the 'revaluation reserve').
(2) The amount of the revaluation reserve shall be shown in the company ’ s balance sheet under a separate sub-heading in the position given for the item 'revaluation reserve' under 'Capital and Reserves' in Format 1 or 2 of the balance sheet formats set out in Part II .
(3) An amount may be transferred —
(a) from the revaluation reserve —
(i) to the profit and loss account, if the amount was previously charged to that account, or it represents realised profit, or
(ii) on capitalisation,
(b) to or from the revaluation reserve in respect of the taxation relating to any profit or loss credited or debited to the reserve,
(4) In subparagraph (3)(a)(ii) 'capitalisation', in relation to an amount standing to the credit of the revaluation reserve, means applying it in wholly or partly paying up unissued shares in the company to be allotted to members of the company as fully or partly paid shares.
Accounting for certain participating interests in entity financial statements
37. (1) Where in accordance with paragraph 33(4) , the interest of a company in an associated undertaking in which a participating interest is held, and the amount of profit or loss attributable to such an interest, are included in the financial statements by way of the equity method of accounting any goodwill arising shall be dealt with in accordance with paragraphs 21 to 23 and 25 .
(2) Where the undertaking in which a participating interest is held is itself a holding undertaking, the net assets and profits or losses to be taken into account are those of the holding undertaking and its subsidiary undertakings (after making any consolidation adjustments).
(3) Where the cumulative profit attributable to the participating interest and recognised in the profit and loss account exceeds the cumulative amount of dividends received or receivable, the amount of the difference shall be placed in a separate reserve which may not be distributed to shareholders.
38. (1) Financial instruments that, under IFRS, may be accounted for in financial statements at fair value, may be so accounted for in financial statements to which the provisions of this Schedule apply, provided that the disclosures required by IFRS are made.
(2) In this paragraph, 'fair value' means fair value determined in accordance with relevant IFRS.
39. A company may include any assets or liabilities, or identified portions of such assets or liabilities that qualify as hedged items under a fair value hedge accounting system at the amount required under that system.
40. (1) This paragraph applies to —
(a) investment property, and
(b) living animals and plants,
(3) In this paragraph, 'fair value' means fair value determined in accordance with relevant IFRS.
Accounting for changes in fair value
41. (1) This paragraph applies where a financial instrument is valued at fair value in accordance with paragraph 38 or 39 or where an asset is valued in accordance with paragraph 40 .
(2) Notwithstanding paragraph 14 , a change in the fair value of an investment property or living animal or plant shall be included in the profit and loss account.
(3) Notwithstanding paragraph 14 , a change in the fair value of a financial instrument shall be accounted for in accordance with IFRS and to the extent the change in fair value is not included in the profit and loss account the amount of the change in value shall be credited or (as the case may be) debited to a separate reserve to be known as the 'fair value reserve'.
42. (1) The fair value reserve shall be adjusted when amounts therein are no longer necessary for the purposes of paragraph 41(3).
(2) The treatment for taxation purposes of amounts credited or debited to the fair value reserve shall be disclosed in a note to the financial statements. ]
F605 [ PART IV
INFORMATION REQUIRED BY WAY OF NOTES TO FINANCIAL STATEMENTS ]
F605 [ Preliminary
43. (1) Any information required in the case of any company by the following provisions of this Part shall (if not given in the company ’ s financial statements) be given by way of a note to those financial statements.
(2) These notes shall be presented in the order in which, where relevant, the items to which they relate are presented in the balance sheet and in the profit and loss account.
44. Paragraphs 45 to 58 require information which either supplements the information given with respect to any particular items shown in the balance sheet or is otherwise relevant to assessing the company ’ s financial position in the light of the information so given.
45. (1) If the company has issued any debentures during the financial year to which the financial statements relate, the following information shall be given:
(a) the reason for making the issue;
(b) the classes of debentures issued;
(c) in respect of each class of debentures, the amount issued and the consideration received by the company for the issue.
(2) Where any of the company ’ s debentures are held by a nominee of or trustee for the company, the nominal amount of the debentures and the amount at which they are stated in the accounting records kept by the company in accordance with section 281 shall be stated.
46. (1) In respect of each item which is or would, but for paragraphs 2(2) and 4(4)(b) , be shown under the general item 'fixed assets' in the company ’ s balance sheet, the following information shall be given:
(b) the effect on any amount shown in the balance sheet in respect of that item of —
(i) any revision of the amount in respect of any assets included under that item made during that year on any basis mentioned in paragraph 33 or under the fair value accounting rules,
(ii) acquisitions during that year of any assets,
(iii) disposals during that year of any assets, and
(iv) any transfers of assets of the company to and from that item during that year.
(2) The reference in subparagraph (1)(a) to the appropriate amounts in respect of any item as at any date there mentioned is a reference to amounts representing the aggregate amounts determined, as at that date, in respect of assets falling to be included under that item —
(a) on the basis of purchase price or production cost (determined in accordance with paragraphs 29 and 30 ),
(b) on any basis mentioned in paragraph 33 , or
(c) under the fair value accounting rules,
as the case may be (leaving out of account in each of clauses (a), (b) and (c) any value adjustments for depreciation or diminution in value).
(3) In respect of each item within subparagraph (1) —
(a) the cumulative amount of value adjustments for depreciation or diminution in value of assets included under that item as at each date mentioned in subparagraph (1)(a) ,
(b) the amount of any such value adjustments made in respect of the financial year concerned,
(c) the amount of any changes made in respect of any such value adjustments during that year in consequence of the disposal of any assets, and
(d) the amount of any other changes made in respect of any such value adjustments during that year,
47. Where any fixed assets of the company (other than listed investments) are included under any item shown in the company ’ s balance sheet at an amount determined on any basis mentioned in paragraph 33(1) to (3) , the following information shall be given:
(a) the years (so far as they are known to the directors) in which the assets were severally valued and the several values;
Financial assets and investments held as current assets
48. (1) In respect of the amount of each item which is or would, but for paragraphs 2(2) or 4(4)(b) , be shown in the company ’ s balance sheet under the general items 'financial assets' or 'investments held as current assets' there shall be stated how much of that amount is ascribable to listed investments.
(2) Where the amount of any listed investments is stated for any item in accordance with subparagraph (1) , there shall also be stated the fair value of those investments where it differs from the amount so stated.
49. (1) This paragraph applies where financial instruments or assets other than financial instruments have been included at fair value by virtue of paragraphs 38, 39 or 40 .
(2) There shall be stated —
(a) the significant assumptions underlying the valuation models and techniques where fair values have been determined otherwise than by reference to market price in an active market,
(b) for each category of financial instruments or assets other than financial instruments, the fair value of the financial instruments or assets, other than financial instruments, in that category and the amounts —
(i) included in the profit and loss account, and
(ii) credited or debited to the fair value reserve,
in respect of financial instruments or assets, other than financial instruments, in that category,
(c) for each class of derivative financial instrument, the extent and nature of the instruments including significant terms and conditions that may affect the amount, timing and certainty of future cash flows, and
50. Where the company has derivative financial instruments that it has not accounted for at fair value, there shall be stated for each class of such derivatives —
(a) the fair value of the derivatives in that class, if such a value can be determined in accordance with paragraph 38 , and
51. Where —
(a) a company has financial assets which could be included at fair value by virtue of paragraph 38 ,
(b) those assets are included in the company ’ s financial statements at an amount in excess of their fair value, and
(c) the company has not made a value adjustment for the diminution in value of those assets in accordance with paragraph 23(1) ,
there shall be stated —
(i) the amount at which either the individual assets or appropriate groupings of those assets is stated in the company ’ s financial statements,
(ii) the fair value of those assets or groupings, and
(iii) the reasons for not making a value adjustment for diminution in value of those assets, including the nature of the evidence that provides the basis for the belief that the amount at which they are stated in the financial statements will be recovered.
Information where investment property or living animals and plants included at fair value
52. (1) This paragraph applies where the amounts to be included in a company ’ s financial statements in respect of investment property or living animals and plants have been determined in accordance with paragraph 40 .
(2) The balance sheet items affected and the basis of valuation adopted in determining the amounts of the assets in question in the case of each such item shall be disclosed in the notes to the financial statements on the accounting policies adopted by the company as required by section 321 .
53. (1) The profit and loss account, balance sheet or notes to the financial statements of a company for a financial year shall show —
(a) the aggregate amount of dividends paid in the financial year (other than dividends for which a liability existed at the immediately preceding financial year end date),
(b) the aggregate amount of dividends the company is liable to pay at the financial year end date (other than dividends for which a liability existed at the immediately preceding financial year end date),
(c) separately, any transfer between the profit and loss account reserve and other reserves,
(d) any other increase or reduction in the balance on the profit and loss account reserve since the immediately preceding financial year end date,
(e) the profit or loss brought forward at the beginning of the financial year, and
54. (1) Where any amount is transferred —
(a) to or from any reserves,
(b) to any provision for liabilities, or
(c) from any provision for liabilities other than for the purpose for which the provision was established,
and the reserves or provisions for liabilities are or would, but for paragraph 4(4)(b) , be shown as separate items in the company ’ s balance sheet, the information mentioned in subparagraph (2) shall be given in respect of each such reserve or provisions for liabilities.
(2) The information, which is to be set out in tabular form, is —
(a) the amount of the reserves or provisions for liabilities as at the date of the beginning of the financial year and as at the financial year end date respectively,
(b) any amount transferred to or from the reserves or provisions for liabilities during that year, and
(3) Particulars shall be given of each provision included in the item 'other provisions for liabilities' in the company ’ s balance sheet in any case where the amount of that provision is material.
55. The amount of any provision for deferred taxation shall be shown separately from the amount of any provision for other taxation.
56. (1) In respect of each item shown under 'creditors' in the company ’ s balance sheet there shall be stated the aggregate amount of any debts included under that item which fall due for payment or repayment after the end of the period of 5 years beginning with the day next following the end of the financial year.
(2) Subject to subparagraph (3) , in relation to each debt falling to be taken into account under subparagraph (1) , the terms of payment or repayment and the rate of any interest payable on the debt shall be stated.
(4) In respect of each item shown under 'creditors' in the company ’ s balance sheet there shall be stated —
(a) the aggregate amount of any debts included under that item in respect of which any security has been given, and
(5) References in subparagraph (1) to an item shown under 'creditors' in the company ’ s balance sheet include references, where amounts falling due to creditors within one year and after more than one year are distinguished in the balance sheet —
(a) in a case within subparagraph (1), to an item shown under the latter of those categories, and
(b) in a case within subparagraph (4) , to an item shown under either of those categories,
and references to items shown under 'creditors' include references to items which would, but for paragraphs 2(2) or 4(4)(b), be shown under that heading.
57. If any fixed cumulative dividends on the company ’ s shares are in arrears, there shall be stated, distinguishing between those shares presented as a liability and other shares —
(a) the amount of the arrears, and
58. (1) Particulars shall be given of any charge on the assets of the company to secure the liabilities of any other person, including, where practicable, the amount secured.
(2) Particulars and the total amount or estimated total amount shall be given with respect to any other financial commitment, guarantee or contingency not provided for in the balance sheet.
(3) An indication of the nature and form of any valuable security given by the company in connection with the commitments, guarantees or contingencies referred to in subparagraph (2) shall be given in the financial statements.
(4) The total amount of any commitments referred to in subparagraph (2) concerning retirement benefits shall be disclosed separately.
(5) Particulars, including details of significant assumptions underlying the valuation models, shall be given of retirement benefit commitments which are included in the balance sheet.
(6) Where any commitment referred to in subparagraphs (4) or (5) relates wholly or partly to retirement benefits payable to past directors of the company, separate particulars shall be given of that commitment.
(7) The aggregate amount of any commitments, guarantees or contingencies referred to in subparagraph (2) which are undertaken on behalf of or for the benefit of —
(a) any holding undertaking or fellow subsidiary undertaking of the company,
(b) any subsidiary undertaking of the company, or
(c) any undertaking in which the company has a participating interest,
shall be separately stated and those within each of clause (a), (b) and (c) shall also be stated separately from those within any other of those clauses.
59. Paragraphs 60 to 63 require information which either supplements the information given with respect to any particular items shown in the profit and loss account or otherwise provides particulars of income or expenditure of the company or of circumstances affecting the items shown in the profit and loss account.
60. Each of the following amounts shall be stated —
(a) the amount of interest on or any similar expenses in respect of —
(i) loans and overdrafts made to the company by credit institutions,
(ii) loans to the company from group undertakings,
(iii) loans of any other kind made to the company,
61. (1) The basis on which the charge for corporation tax, income tax and other taxation on profits (whether payable in or outside the State) is computed shall be stated.
(3) The amount of the charge for corporation tax, income tax and other taxation on profits or capital gains, so far as charged to revenue, including taxation payable outside the State on profits (distinguishing where practicable between corporation tax and other taxation) shall be stated.
(4) The amounts referred to in subparagraph (3) shall be stated separately in respect of each of the amounts which is or would, but for paragraph 4(4)(b), be shown under the following item in the profit and loss account, that is to say, 'tax on profit or loss'.
62. (1) If, in the course of the financial year, the company has carried on business of 2 or more classes which, in the opinion of the directors, differ substantially from each other, there shall be stated in respect of each class (describing it) the amount of the turnover attributable to that class.
(2) If, in the course of the financial year, the company has supplied markets which, in the opinion of the directors, differ substantially from each other, the amount of the turnover attributable to each such market shall also be stated.
(3) In subparagraph (2) , 'market' means a market delimited by geographical bounds.
(4) In analysing for the purposes of this paragraph the source (in terms of business or in terms of market) of turnover, the directors of the company shall have regard to the manner in which the company ’ s activities are organised.
(5) For the purpose of this paragraph —
(a) classes of business which, in the opinion of the directors, do not differ substantially from each other shall be treated as one class, and
(b) markets which, in the opinion of the directors, do not differ substantially from each other shall be treated as one market,
and any amounts properly attributable to one class of business or (as the case may be) to one market which are not material may be included in the amount stated in respect of another.
(6) Where, in the opinion of the directors, the disclosure of any information required by this paragraph would be seriously prejudicial to the interests of the company, that information need not be disclosed, but the fact that any such information has not been disclosed shall be stated.
Exceptional items and miscellaneous matters
63. (1) Where any amount relating to any preceding financial year is included in any item in the profit and loss account, the effect shall be stated.
(2) The profit and loss account or the notes to the financial statements shall disclose information on the nature, amount and effect of individual items of income and expenditure that are exceptional by virtue of size or incidence.
(3) Any amount expended on research and development in the financial year, and any amount committed in respect of research and development in subsequent years, shall be stated.
(4) Where, in the opinion of the directors, the disclosure of any information required by subparagraph (3) would be prejudicial to the interests of the company, that information need not be disclosed, but the fact that any such information has not been disclosed shall be stated.
64. Paragraphs 65 to 67 require other information to be given in the notes to the financial statements.
65. (1) Subject to subparagraph (3) , particulars shall be given in the notes to the financial statements of a company of transactions which have been entered into with related parties by the company if such transactions are material and have not been concluded under normal market conditions and the particulars shall include the amount of such transactions, the nature of the related party relationship and other information about the transactions which is necessary for an understanding of the financial position of the company.
(2) The provision of particulars and other information about individual transactions may be aggregated according to their nature, except where separate information is necessary for an understanding of the effects of related party transactions on the financial position of the company.
(3) Subparagraph (1) shall not apply to transactions which are entered into between 2 or more members of a group if any subsidiary undertaking which is party to the transaction is wholly owned by such a member.
(4) A word or expression that is used in this paragraph and is also used in IFRS has the meaning in this paragraph that it has in IFRS.
66. Where sums originally denominated in foreign currencies have been brought into account under any items shown in the balance sheet or profit and loss account, the basis on which those sums have been translated into euro or, if different, the functional currency of the company, shall be stated.
67. The particulars and financial impact of material events that have occurred after the end of the financial year shall be given in the notes to the financial statements. ]
F605 [ PART V
SPECIAL PROVISIONS WHERE A COMPANY IS A HOLDING COMPANY OR SUBSIDIARY UNDERTAKING ]
F605 [ Dealings with or interests in group undertakings
68. (1) This Part applies where the company is a holding company, whether or not it is itself a subsidiary undertaking.
(2) Where a company is a holding company or a subsidiary undertaking and any item required by Part II to be shown in the company ’ s balance sheet, in relation to group undertakings, includes —
(a) amounts attributable to dealings with or interests in any holding undertaking or fellow subsidiary undertaking, or
(b) amounts attributable to dealings with or interests in any subsidiary undertaking of the company,
the aggregate amounts within clauses (a) and (b), respectively, shall be shown as separate items, either by way of subdivision of the relevant item in the balance sheet or in a note to the company ’ s financial statements.
Interests in debentures of holding company held by subsidiary undertakings
69. (1) Subject to subparagraph (2) , where the company is a holding company, the number, description and amount of the debentures of the company held by its subsidiary undertakings or their nominees shall be disclosed in a note to the company ’ s financial statements.
(2) Subparagraph (1) does not apply in relation to any debentures —
(b) in the case of which it is concerned as trustee,
provided that in the latter case neither the company nor a subsidiary undertaking of the company is beneficially interested under the trust, otherwise than by way of security only for the purposes of a transaction entered into by it in the ordinary course of a business which includes the lending of money.
Holding undertakings preparing group financial statements
70. (1) Where a company is a subsidiary undertaking, the information specified in subparagraphs (2), (3) and (4) shall be stated with respect to the holding undertaking of —
(a) the largest group of undertakings for which group financial statements are drawn up and of which the company is a member, and
(3) There shall be stated —
(a) if the holding undertaking is incorporated, the address of the holding undertaking ’ s registered office or where the holding undertaking is incorporated outside the State, the registered office (howsoever described) of the holding undertaking in the country in which it is incorporated, or
(4) If copies of the group financial statements referred to in subparagraph (1) are available to the public, there shall be stated the addresses from which copies of the financial statements may be obtained.
71. (1) This paragraph applies where a company is a holding company and either —
(a) does not prepare group financial statements, or
(b) prepares group financial statements which do not consolidate one or more of its subsidiary undertakings,
and references in this paragraph to subsidiary undertakings shall be read, in a case within clause (b) , as references to such of the subsidiary undertakings of the company concerned as are not consolidated in the group financial statements.
(2) Subject to the following provisions of this paragraph, there shall be given in the notes to the company ’ s entity financial statements —
(a) the reasons why subsidiary undertakings are not consolidated in group financial statements, and
(i) showing any qualifications contained in the reports of the statutory auditors of the subsidiary undertakings on their financial statements for their respective financial years ending with or during the financial year of the company, and
(ii) of any note or saving contained in those financial statements to call attention to a matter which, apart from the note or saving, would properly have been referred to in such a qualification,
in so far as the matter which is the subject of the qualification or note is not covered by the company ’ s entity financial statements and is material from the point of view of its members.
(3) Subject to the following provisions of this paragraph, the aggregate amount of the total investment of the holding company in the shares of the subsidiary undertakings shall be stated in a note to the company ’ s entity financial statements by way of the equity method of accounting.
(4) In so far as information required by any of the preceding provisions of this paragraph to be stated in a note to the company ’ s entity financial statements is not obtainable, a statement to that effect shall be given instead in a note to those entity financial statements.
(5) Where, in any case within subparagraph (1)(b) , the company prepares group financial statements, references in the preceding subparagraphs to the company ’ s entity financial statements shall be read as references to the group financial statements.
72. Where a company has subsidiary undertakings whose financial years did not end with that of the company, the following information shall be given in relation to each such subsidiary undertaking (whether or not consolidated in any group financial statements prepared by the company) by way of a note to the company ’ s entity financial statements or (where group financial statements are prepared) to the group financial statements, that is to say —
(a) the reasons why the company ’ s directors consider that the subsidiary undertakings' financial years should not end with that of the company, and
(b) the dates on which the subsidiary undertakings' financial years ending last before that of the company respectively ended or the earliest and latest of those dates. ]
F605 [ PART VI
INTERPRETATION OF CERTAIN EXPRESSIONS IN SCHEDULE ]
F605 [ Assets: Fixed or Current
73. For the purposes of this Schedule, assets of a company shall be taken to be fixed assets if they are intended for use on a continuing basis in the company ’ s activities, and any assets not intended for such use shall be taken to be current assets.
74. References in this Schedule to capitalising any work or costs are references to treating that work or those costs as a fixed asset.
75. In this Schedule, 'investment property' means land or buildings (or both) held to earn rentals or for capital appreciation (or both).
76. In this Schedule, 'listed investments' means investments as respects which there has been granted a listing on —
(a) any regulated market or other stock exchange in the State,
(b) any regulated market or other stock exchange of repute in any other EEA state, or
77. For the purposes of this Schedule, a loan shall be treated as falling due for payment, and an instalment of a loan shall be treated as falling due for payment, on the earliest date on which the lender could require repayment or (as the case may be) payment, if the lender exercised all options and rights available to him or her.
78. In this Schedule, 'material' means the status of information where its omission or misstatement could reasonably be expected to influence decisions that users make on the basis of the financial statements of the undertaking; and the materiality of individual items shall be assessed in the context of other similar items.
79. (1) References in this Schedule to value adjustments for depreciation or diminution in value of assets are references to any amount written off by way of providing for depreciation or diminution in value of assets.
(2) Any reference in the profit and loss account formats set out in Part II to the depreciation of, or amounts written off, assets of any description is a reference to the movement in any value adjustment for depreciation or diminution in value of assets of that description.
80. References in this Schedule to provisions for liabilities are references to any amount retained as reasonably necessary for the purpose of providing for any liability the nature of which is clearly defined and which exists at the financial year end date but, as respects the amount of which or the date on which it will be settled, there is uncertainty.
81. References in this Schedule (however expressed) to the purchase price of an asset of a company or of any raw materials or consumables used in the production of any such asset shall be read as including references to any consideration (whether in cash or otherwise) given by the company in respect of that asset or in respect of those materials or consumables (as the case may require). ]