Companies (Accounting) Act 2017

“1400A. The definition of ‘ineligible entities’ in section 275(1) shall apply to an investment company as if—

(a) in paragraph (c), ‘undertakings,’ were substituted for ‘undertakings, or’,

(b) in paragraph (d)(ii), ‘shall be read accordingly, or’ were substituted for ‘shall be read accordingly;’, and

(c) the following paragraph were inserted after paragraph (d):

‘(e) are investment companies;’.”.

86. Filing of financial statements by investment company

86. The Principal Act is amended by the insertion of the following section after section 1401:

“1401A. (1) An investment company shall, once in every year after the expiration of its first financial year, deliver to the Registrar, in the prescribed manner, copies of the documents referred to in subsection (2) not later than 11 months after the end of the company’s financial year.

(2) The documents are as follows, namely:

(a) the statutory financial statements of the company for the financial year;

(b) the directors’ report for the financial year;

(c) the statutory auditors’ report on those financial statements and that directors’ report.

(3) The reference in subsection (1) to a copy of a document is a reference to a copy that satisfies the following conditions:

(a) it is a true copy of the original save for the difference that the signature or signatures on the original, and any date or dates thereon, shall appear in typeset form on the copy;

(b) it is accompanied by a certificate of a director and the secretary of the company, that bears the signature of the director and the secretary in electronic or written form, stating that the copy is a true copy of the original (and one such certificate relating to all of the documents mentioned in subsection (1) suffices and the foregoing statement need not be qualified on account of the difference permitted by paragraph (a) as to the form of a signature or of a date).

(4) Section 376 shall apply to an investment company as if the following subsection were substituted for subsection (1):

‘(1) This section has effect where the directors of an investment company have prepared revised financial statements or a revised directors’ report under section 367 and a copy of the original statutory financial statements or directors’ report, has been delivered to the Registrar under section 1401A.’.

(5) If an investment company fails to comply with the requirements of this section, the company and any officer of it who is in default shall be guilty of a category 3 offence.

(6) In subsection (5), ‘officer’ includes any shadow director and de facto director.”.

87. Payments to governments

87. The Principal Act is amended by the insertion of the following Part after Part 25:

“PART 26

Payments To Governments

CHAPTER 1

Preliminary

Interpretation

1449. (1) In this Part—

‘consolidated payment report’ has the meaning assigned to it by section 1451;

‘entity payment report’ has the meaning assigned to it by section 1450;

‘equivalent reporting requirements’ means third country reporting requirements assessed as equivalent to the requirements of Chapter 10 of the Accounting Directive in accordance with Article 46 of that Directive;

‘logging undertaking’ means an undertaking which undertakes in primary forests the activity referred to in Section A, Division 02, Group 02.2 of Annex I to Regulation (EC) No. 1893/2006 of the European Parliament and of the Council of 20 December 2006[^4] establishing the statistical classification of economic activities NACE Revision 2 as set out in Table 1 of Schedule 18; and ‘logging company’ shall be read accordingly;

‘mining or quarrying undertaking’ means an undertaking which performs any activity involving the exploration, prospection, discovery, development, and extraction of minerals, oil, natural gas deposits or other materials, within the activities listed in Section B, Divisions 05 to 08 of Annex I to Regulation (EC) No. 1893/2006 of the European Parliament and of the Council of 20 December 2006[^5] establishing the statistical classification of economic activities NACE Revision 2 as set out in Table 2 of Schedule 18; and ‘mining or quarrying company’ shall be read accordingly;

‘payment’ means an amount paid, whether in money or in kind, for relevant activities, where the payment includes any of the following:

(a) production entitlements;

(b) taxes levied on the income, production or profits of companies, excluding taxes levied on consumption such as value added taxes, personal income taxes or sales taxes;

(c) royalties;

(d) dividends, other than dividends paid by an undertaking to a government as an ordinary shareholder of that undertaking, where—

(i) the dividend is paid to the government on the same terms as to other ordinary shareholders, and

(ii) the dividend is not paid in lieu of production entitlements or royalties;

(e) signature, discovery and production bonuses;

(f) licence fees, rental fees, entry fees and other considerations for licences or concessions;

(g) payments for infrastructure improvements;

‘primary forest’ has the same meaning as it has in Directive 2009/28/EC of the European Parliament and of the Council of 23 April 2009[^6] on the promotion of the use of energy from renewable sources and amending and subsequently repealing Directives 2001/77/EC and 2003/30/EC;

‘project’ means operational activities that—

(a) are governed by—

(i) a single contract, licence, lease, concession or similar legal agreement, or

(ii) multiple contracts, licences, leases, concessions or similar legal agreements that are substantially interconnected,

and

(b) form the basis for payment liabilities with a government;

‘relevant undertaking’ means an undertaking within the meaning of

‘ineligible entity’; and ‘relevant company’ shall be read accordingly;

‘relevant activities’ means—

(a) the activity specified in Table 1 of Schedule 18 in primary forests, or

(b) any activity involving the exploration, prospection, discovery, development, and extraction of minerals, oil, natural gas deposits or other materials, within the economic activities specified in Table 2 of Schedule 18;

‘substantially interconnected’ means forming a set of operationally and geographically integrated contracts, licences, leases or concessions or related agreements with substantially similar terms that are signed with a government, giving rise to payment liabilities.

(2) A word or expression that is used in this Part and is also used in Chapter 10 of the Accounting Directive has, unless the context otherwise requires, the same meaning in this Part as it has in Chapter 10 of the Accounting Directive.

CHAPTER 2

Obligation to prepare payment reports

Obligation to prepare entity report on payments to governments

1450. Subject to sections 1454, 1455 and 1456, the directors of a company which is a large company or a relevant company shall, where such company is—

(a) a mining or quarrying company, or

(b) a logging company,

prepare and make available to the public each year a report on payments made to governments for each financial year (in this Part referred to as the ‘entity payment report’).

Obligation to prepare a consolidated payment report

1451. (1) Subject to subsection (2) and sections 1454, 1456 and 1457, the directors of a holding company which is a large company or a relevant company shall—

(a) if the holding company is obliged to prepare group financial statements in accordance with section 293, and

(b) if the holding company or any of its subsidiary undertakings is—

(i) a mining or quarrying undertaking, or

(ii) a logging undertaking,

prepare and make available to the public each year a consolidated report on payments made to governments for each financial year of the holding company (in this Part referred to as a ‘consolidated payment report’).

(2) This section shall not apply to the directors of—

(a) a holding company of a small group, except where any group undertaking is a relevant undertaking, or

(b) a holding company of a medium group, except where any group undertaking is a relevant undertaking.

CHAPTER 3

Content of payment reports

Content of entity payment report

1452. (1) A company shall in respect of its entity payment report, for each financial year, include the following in relation to its relevant activities:

(a) the government to which each payment has been made, including the country of that government;

(b) the total amount of payments made to each government;

(c) the total amount per type of payment made to each government;

(d) where those payments have been attributed to a specific project, the total amount per type of payment made for each such project and the total amount of payments for each such project.

(2) Where a company makes a payment that is not attributable to a specific project, it shall not be necessary in the entity payment report to allocate it to a specific project.

(3) A company shall not be required to include a payment in the entity payment report if—

(a) it is a single payment of an amount less than €100,000, or

(b) it forms part of a series of related payments within a financial year where the total amount of that series of payments is less than €100,000.

(4) Payments, activities and projects shall not be artificially split or aggregated to avoid the application of this Part.

(5) The disclosure of payments shall reflect the substance, rather than the form, of each payment, relevant activity or project concerned.

(6) Where payments in kind are made to a government, the entity payment report shall state the value of such payments in kind and, where applicable, the volume of those payments in kind, and the directors shall provide supporting notes to explain how the value of such payments in kind has been determined.

Content of consolidated payment report

1453. (1) A holding company shall in respect of its consolidated payment report, for each financial year, include the following information in relation to its relevant activities:

(a) the government to which each payment has been made, including the country of that government;

(b) the total amount of payments made to each government;

(c) the total amount per type of payment made to each government;

(d) where those payments have been attributed to a specific project, the total amount per type of payment made for each such project and the total amount of payments for each such project.

(2) A consolidated payment report shall include—

(a) any payments resulting from the relevant activities of a mining or quarrying undertaking, and

(b) any payments resulting from the relevant activities of a logging undertaking.

(3) Where an undertaking makes a payment that is not attributable to a specific project, it shall not be necessary in the consolidated payment report to allocate it to a specific project.

(4) A company shall not be required to include a payment in the consolidated payment report if—

(a) it is a single payment of an amount less than €100,000, or

(b) it forms part of a series of related payments within a financial year whose total amount is less than €100,000.

(5) Payments, activities and projects shall not be artificially split or aggregated to avoid the application of this Part.

(6) The disclosure of payments shall reflect the substance, rather than the form, of each payment, relevant activity or project concerned.

(7) Where payments in kind are made to a government, the consolidated payment report shall state the value of such payments in kind and, where applicable, the volume of those payments in kind, and the directors shall provide supporting notes to explain how the value of such payments in kind has been determined.

(8) In this section, ‘relevant activities’, in relation to a holding company, means the activities of—

(a) the holding company, and

(b) any subsidiary undertaking included in the group financial statements of the holding company prepared in accordance with section 293.

CHAPTER 4

Payment reports: Exemptions and exclusions

Exemption from preparation where certain payments included in consolidated payment report of holding company or higher holding undertaking

1454. (1) The directors of a company that is a subsidiary or a holding company shall be exempt from preparing an entity payment report if any payments to governments made by the company are included in the consolidated payment report prepared by the holding company in accordance with section 1451.

(2) The directors of a company that is a subsidiary or a holding company shall be exempt from the requirement to prepare an entity payment report under section 1450 or, in the case of a holding company, a consolidated payment report under section 1451 if—

(a) any holding undertaking or higher holding undertaking of the company is subject to the provisions implementing Chapter 10 of the Accounting Directive in a Member State other than the State, and

(b) any payments to governments made by the company are included in the consolidated report drawn up by that holding undertaking.

Exemption from preparation where company is subject to equivalent reporting requirements

1455. The directors of a company shall be exempt from preparing an entity payment report if—

(a) the company is subject to equivalent reporting requirements, and

(b) the payments to governments made by the company are included in a report prepared in accordance with equivalent reporting requirements.

Exemption from preparation where holding undertaking or higher holding undertaking is subject to equivalent reporting requirements

1456. The directors of a company that is a subsidiary or a holding company are exempt from preparing an entity payment report under section 1450 or, in the case of a holding company, a consolidated payment report under section 1451 if—

(a) any holding undertaking or higher holding undertaking of the company is subject to the provisions implementing Chapter 10 of the Accounting Directive in a Member State other than the State,

(b) that holding undertaking or higher holding undertaking of the company that is governed by the laws of a Member State is subject to equivalent reporting requirements, and

(c) the payments to governments made by the company are included in a consolidated report drawn up to the same date, or an earlier date, in the same financial year, by that holding undertaking prepared in accordance with equivalent reporting requirements.

Certain undertakings exempt from inclusion in a consolidated payment report

1457. (1) Subject to subsection (2), an undertaking, including a relevant undertaking, shall not be required to be included in a consolidated payment report where—

(a) severe long-term restrictions substantially hinder the holding company in the exercise of its rights over the assets or management of that undertaking,

(b) in extremely rare cases, the information necessary for the preparation of the consolidated payment report cannot be obtained without disproportionate expense or undue delay, or

(c) the interest of the holding company is held exclusively with a view to subsequent resale.

(2) The exemptions referred to in subsection (1) shall apply only if the holding company availed of the similar exemptions available under section 303 in relation to that undertaking for the purposes of preparing its group financial statements in accordance with section 293.

CHAPTER 5

Approval and signing of payment reports

Approval and signing of entity payment reports and consolidated payment reports

1458. (1) An entity payment report prepared in accordance with section 1450 and a consolidated payment report prepared in accordance with section 1451 shall be approved by the board of directors and signed on their behalf by not less than 2 directors, where there are 2 or more directors.

(2) Without prejudice to the generality of section 11, where the company has a sole director, subsection (1) shall operate to require that director to approve and sign the entity payment report or consolidated payment report.

(3) Every copy of every entity payment report or consolidated payment report which is delivered to the Registrar or which is otherwise circulated, published or issued shall state the names of the persons who signed the payment report on behalf of the board of directors.

(4) If any copy of an entity payment report or a consolidated payment report is delivered to the Registrar or is otherwise circulated, published or issued without the payment report (the original of it as distinct from the copy) having been signed as required by this section or without the required statement of the signatories’ names on the copy being included, the company and any officer of it who is in default shall be guilty of a category 2 offence.

(5) In subsection (4), ‘officer’ includes any shadow director and de facto director.

CHAPTER 6

Publication of payment reports

Delivery of copy of entity payment reports and consolidated payment reports to Registrar

1459. (1) A company, the directors of which are required to prepare—

(a) an entity payment report in accordance with section 1450, or

(b) a consolidated payment report in accordance with section 1451,

shall deliver a copy of that entity payment report or consolidated payment report, as the case may be, to the Registrar within 11 months after the end of the financial year of the company.

(2) If a company to which subsection (1) applies fails to comply with the requirements of this section, the company and any officer of it who is in default shall be guilty of a category 3 offence.

(3) In subsection (2), ‘officer’ includes any shadow director and de facto director.

Delivery of copy of entity payment reports and consolidated payment reports prepared under equivalent reporting requirements to Registrar

1460. (1) A company, the directors of which are exempt under sections 1455 or 1456 from preparing an entity payment report or consolidated payment report, shall deliver to the Registrar a copy of any payment report or consolidated payment report prepared in accordance with equivalent reporting requirements within 28 days after such payment report is made available to the public under the equivalent reporting requirements.

(2) Where any document required to be delivered under this section is in a language other than the English language or the Irish language, there shall be annexed to the copy of that document delivered a translation of it into the English language or the Irish language, certified in the manner prescribed for the purposes of section 348.

(3) If a company to which subsection (1) applies fails to comply with the requirements of this section, the company and any officer of it who is in default shall be guilty of a category 3 offence.

(4) In subsection (3), ‘officer’ includes any shadow director and de facto director.”.

88. Amendments of Principal Act consequential to repeal of sections 350 and 351

88. The Principal Act is amended—

(a) by the substitution, of “section 275” for “section 350” in each place that it occurs in—

(i) section 225(1), and

(ii) section 900(1),

(b) by the substitution, of “section 280A or 280B” for “section 350” in each place that it occurs in—

(i) section 509(7), and

(ii) section 517(8),

(c) by the substitution, of “as a small company by virtue of section 280A or 280B or a medium company by virtue of section 280F or 280G” for “as a small or medium company by virtue of section 350” in each place that it occurs in—

(i) section 747(6)(b),

(ii) section 748(5)(b), and

(iii) section 750(4),

(d) by the substitution, in section 1378, of “Sections 352 to 356” for “Sections 350 to 356”,

(e) in section 274, in the definition of “abridged financial statements”, by the substitution of “prepared in accordance with section 353” for “prepared in accordance with section 353 or 354”, and

(f) by the deletion of “section 297” in each place that it occurs in—

(i) the Table to section 1002, and

(ii) Part 2 of the Table to section 1230.

89. Amendments of Principal Act - Schedules

89. The Principal Act is amended—

(a) by the substitution of the text set out in Schedule 1 for Schedule 3 to that Act,

(b) by the insertion of the text set out in Schedule 2 as Schedule 3A to that Act,

(c) by the insertion of the text set out in Schedule 3 as Schedule 3B to that Act,

(d) by the substitution of the text set out in Schedule 4 for Schedule 4 to that Act,

(e) by the insertion of the text set out in Schedule 5 as Schedule 4A to that Act, and

(f) by the insertion of the text set out in Schedule 6 as Schedule 18 to that Act.

90. Miscellaneous amendments of Principal Act consequential to insertion of Schedules

90. The Principal Act is amended—

(a) in section 120(3)(b), by the substitution of the following subparagraph for subparagraph (i):

“(i) where the company does not qualify for the micro companies regime and prepares Companies Act entity financial statements, in the note to the statements required by paragraph 24(2) of Schedule 3, or paragraph 24(2) of Schedule 3A, as the case may be; or”,

(b) in section 121(7), in the definition of “relevant item”, by the substitution of “Schedule 3, 3A or 3B, as the case may be” for “Schedule 3”,

(c) in section 123(5)(b), by the substitution of “paragraph 14(a) of Schedule 3, 3A or 3B and paragraph 37(3) of Schedule 3 or 3A, as the case may be” for “ paragraphs 14(a) and 37(3) of Schedule 3”,

(d) in section 238(8)(c)(i), by the substitution of “paragraph 80 of Schedule 3, paragraph 65 of Schedule 3A or paragraph 39 of Schedule 3B, as the case may be” for “paragraph 82 of Schedule 3”,

(e) in section 275(1), by the substitution—

(i) in the definition of “associated undertaking”, of “paragraph 21 of Schedule 4 or 4A, as the case may be” for “paragraph 20 of Schedule 4”, and

(ii) in the definition of “participating interest” by the substitution of “paragraph 23 of Schedule 4 or 4A as the case may be,” for “paragraph 22 of Schedule 4”,

(f) in section 1043(5)(a), by the substitution of “paragraph 80 of Schedule 3 or paragraph 65 of Schedule 3A, as the case may be” for “paragraph 82 of Schedule 3”, and

(g) in section 1083(8), by the substitution of “Schedule 3 or 3A, as the case may be” for “Schedule 3”.

PART 3 Other Miscellaneous Amendments to Principal Act

91. Amendment of section 117 of Principal Act

91. Section 117 of the Principal Act is amended, by the substitution of the following subsection for subsection (4):

“(4) For the purposes of subsections (2) and (3)—

(a) where the company prepares Companies Act entity financial statements, any provision or value adjustment (within the meaning of Schedule 3, 3A or 3B, as the case may be) shall be treated as a realised loss other than a value adjustment in respect of any diminution in value of a fixed asset appearing on a revaluation of all the fixed assets or of all the fixed assets other than goodwill (and this qualification is referred to in subsections (5) and (6) as 'the exception to subsection (4)(a)'), and

(b) where the company prepares IFRS financial statements, a provision or value adjustment of any kind shall be treated as a realised loss.”.

92. Amendment of section 621 of Principal Act

92. Section 621 of the Principal Act is amended—

(a) in subsection (2)(e), by the substitution of “to the extent that the company” for “save to the extent that the company”, and

(b) in subsection (7)(b), by the substitution of “any charge created as a floating charge by the company” for “any floating charge created by the company”.

93. Amendment of section 633 of Principal Act

93. Section 633 of the Principal Act is amended—

(a) by the substitution of the following subsection for subsection (4):

“(4) In this section—

‘liquidator’ includes provisional liquidator;

‘prescribed fee’ means a fee prescribed by regulations made by the Supervisory Authority with the consent of the Minister;

‘prescribed form’ means a form prescribed by regulations made by the Supervisory Authority.”,

and

(b) in paragraph (5)(a) of the Table to the section, by the substitution of “within 30 months after” for “within 2 years after”.

94. Amendment of section 842 of Principal Act

94. Section 842 of the Principal Act is amended—

(a) in paragraph (h), by the deletion of “or”,

(b) in paragraph (i), by the substitution in subparagraph (ii) of “in the State, or” for “in the State.”, and

(c) by the insertion of the following paragraph after paragraph (i):

“(j) that the person has contravened section 4 or 5 of the Competition Act 2002 or Article 101 or 102 of the Treaty on the Functioning of the European Union.”.

95. Amendment of section 844 of Principal Act

95. Section 844 of the Principal Act is amended by the insertion of the following subsection after subsection (4):

“(4A) An application under section 842(j) may be made by the competent authority (within the meaning of the Competition Act 2002).”.

96. Investigation by disciplinary committees of prescribed accountancy bodies

96. The Principal Act is amended by the insertion of the following section after section 931:

“931A. (1) In this section—

‘client’ has the same meaning as it has in section 934;

‘relevant person’ in relation to an investigation of a member of a prescribed accountancy body, means—

(a) a member of the prescribed accountancy body,

(b) a client or former client of such member,

(c) if the client or former client is a body corporate, a person who is or was an officer, employee or agent of the client or former client,

(d) the prescribed accountancy body or a person who is or was an officer, employee or agent of that body, or

(e) any person whom the prescribed accountancy body reasonably believes has information or documents relating to the investigation other than information or documents the disclosure of which is prohibited or restricted by law.

(2) For the purposes of an investigation of a possible breach of a prescribed accountancy body’s standards by a member, a disciplinary committee may require a relevant person to do one or more of the following:

(a) produce to the committee all books or documents relating to the investigation that are in the relevant person’s possession or control;

(b) attend before the committee;

(c) give the committee any other assistance in connection with the investigation that the relevant person is reasonably able to give.

(3) For the purposes of an investigation referred to in subsection (2), the disciplinary committee may—

(a) examine on oath, either by word of mouth or on written interrogatories, a relevant person,

(b) administer oaths, for the purpose of that examination, and

(c) record, in writing, answers of a person so examined and require that person to sign them.

(4) The disciplinary committee may certify the refusal or failure to the court if a relevant person refuses or fails to do one or more of the following:

(a) produce to the committee any book or document that it is the person’s duty under this section to produce;

(b) attend before the committee when required to do so under this section;

(c) answer a question put to the person by the committee with respect to the matter under investigation.

(5) On receiving a certificate of refusal or failure concerning a relevant person, the court may enquire into the case and, after hearing any evidence that may be adduced, may do one or more of the following:

(a) direct that the relevant person attend or re-attend before the disciplinary committee or produce particular books or documents or answer particular questions put to him or her by the committee;

(b) direct that the relevant person need not produce a particular book or document or answer a particular question put to him or her by that committee;

(c) make any other ancillary or consequential order or give any other direction that the court thinks fit.

(6) The production of any books or documents under this section by a person who claims a lien on them does not prejudice the lien.

(7) Any information produced or answer given by a member of a prescribed accountancy body in compliance with a requirement under this section may be used in evidence against the member in any proceedings whatsoever, save proceedings for an offence (other than perjury in respect of such an answer).”.

97. Liability of prescribed body for acts, omissions etc.

97. The Principal Act is amended by the insertion of the following section after section 942:

“942A. (1) Neither a prescribed body nor any person who is or was—

(a) a member or director, or

(b) other officer or employee,

of the prescribed body shall be liable for damages for anything done, anything purported to be done or anything omitted to be done by the prescribed body or that person in performing the functions specified in subsection (2) unless the act or omission is shown to have been in bad faith.

(2) Subsection (1) applies to the issuing of accounting standards.

(3) In this section, 'prescribed body' means a body prescribed under section 943(1)(h).”.

98. Further miscellaneous amendments of Principal Act

98. The Principal Act is amended—

(a) in section 2(1), in the definition of “Director”, by the substitution of “952” for “954”,

(b) in section 183—

(i) in subsection (9), by the substitution of “previous death of the appointer” for “previous death or insanity of the appointer”, and

(ii) in subsection (10), by the substitution of “such death, revocation or transfer” for “such death, insanity, revocation or transfer”,

(c) in section 408(1), by the substitution of the following paragraph for paragraph (c):

“(c) shares, including shares in a body corporate, bonds or debt instruments,”,

(d) in section 440(1)(a), by the substitution of “any charge created as a floating charge by the company” for “a floating charge”,

(e) in section 497(3), by the substitution of “draft terms of division” for “draft terms of merger”,

(f) in section 580(4), by the substitution of “in the form prescribed by the Minister” for “in the prescribed form”,

(g) in section 604(2), by the substitution of “subsection (1)(i) or (ii)” for “subsection (1)(i),”,

(h) in section 682(2), by the substitution of “in the form prescribed by the Minister” for “in the prescribed form”,

(i) in section 823(5), by the substitution of “section 895” for “section 894”,

(j) in section 1178(5), by the substitution of “section 1190” for “section 1189”,

(k) in section 1205—

(i) in paragraph (b), by the substitution of “subsection (9)” for “subsection (8)”, and

(ii) by the substitution of the following paragraph for paragraph (c):

“(c) in subsection (10), there shall be substituted ‘such death or revocation’ for ‘such death, insanity, revocation or transfer’.”,

(l) in section 1312(5), by the substitution of “section 1002” for “section 1004”, and

(m) in section 1317(1)(a)(iv), by the substitution of “section 1319” for “section 1318”.

PART 4 Miscellaneous

99. Amendment of Transparency (Directive 2004/109/EC) Regulations 2007

99. The Transparency (Directive 2004/109/EC) Regulations 2007 (S.I. No. 277 of 2007) are amended—

(a) in Regulation 2—

(i) by the deletion of the definition of “Act of 2006”,

(ii) in the definition of “supplemental Directive” by the substitution of “section 1379 of the Act of 2014” for “the Act of 2006”,

(iii) in the definition of “transparency (regulated markets) law” by the substitution of “section 1379 of the Companies Act 2014” for “the Act of 2006”,

(iv) in the definition of “treasury shares” by the substitution of “Act of 2014” for “Companies Acts”, and

(v) by the insertion of the following definitions:

“ ‘Accounting Directive’ means Directive 2013/34/EU of the European Parliament and of the Council of 26 June 2013[^7] on the annual financial statements, consolidated financial statements and related reports of certain types of undertakings, amending Directive 2006/43/EC of the European Parliament and of the Council and repealing Council Directives 78/660/EEC and 83/349/EEC;

‘Act of 2014’ means the Companies Act 2014 (No. 38 of 2014);”,

(b) in paragraph (a) of Regulation 4(4), by the substitution of “Accounting Directive” for “Seventh Council Directive 83/349/EEC of 13 June 1983”, and

(c) in Regulation 5—

(i) in paragraph (2)(a), by the substitution of “Article 34 and, where relevant, Article 20 of the Accounting Directive” for “Article 37 of the Seventh Council Directive 83/349/EEC of 13 June 1983 (the most recent measure adopted by the State for its implementation being the European Communities (Financial Reporting Standards and Miscellaneous Amendments) Regulations 2005 (S.I. No. 116 of 2005))”,

(ii) in paragraph (2)(b), by the substitution of “Article 34, and where relevant, Article 20 of the Accounting Directive” for “Articles 51 and 51a of the Fourth Council Directive 78/660/EEC of 25 July 1978 (the most recent measure adopted by the State for their implementation being the regulations referred to in subparagraph (a))”,

(iii) in paragraph (3)(a), by the substitution of “Article 29 of the Accounting Directive” for “Article 36 of the Seventh Council Directive 83/349/EEC of 13 June 1983 (the most recent measure adopted by the State for its implementation being the regulations referred to in paragraph (2)(a))”, and

(iv) in paragraph (3)(b), by the substitution of “Article 19, and where relevant, Article 20 of the Accounting Directive” for “Article 46 of the Fourth Council Directive 78/660/EEC of 25 July 1978 (the most recent measure adopted by the State for its implementation being the regulations referred to in paragraph (2)(a))”.

100. Amendment of European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations 2011

100. The European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations 2011 (S.I. No. 352 of 2011) are amended—

(a) by the insertion of the following Regulation after Regulation 42:

“42A. (1) This Regulation applies to UCITS which are constituted as—

(a) investment companies with fixed capital that are registered as public limited companies, or

(b) investment companies with variable capital that are registered as public limited companies and the articles of which provide that—

(i) the amount of the paid-up share capital of the investment company concerned shall at all times be equal to the net asset value of the company, and

(ii) the shares of the investment company concerned shall have no par value.

(2) A company to which this Regulation applies shall, once in every year after the expiration of its first financial year, deliver to the Registrar, in the prescribed manner, copies of the documents referred to in paragraph (3) not later than 11 months after the end of the company’s financial year.

(3) The documents are as follows, namely:

(a) the statutory financial statements of the company for the financial year;

(b) the directors’ report, including any group directors’ report for the financial year;

(c) the statutory auditors’ report on those financial statements and that directors’ report.

(4) The reference in paragraph (2) to a copy of a document is a reference to a copy that satisfies the following conditions:

(a) it is a true copy of the original save for the difference that the signature or signatures on the original, and any date or dates thereon, shall appear in typeset form on the copy;

(b) it is accompanied by a certificate of a director and the secretary of the company, that bears the signature of the director and the secretary in electronic or written form, stating that the copy is a true copy of the original (and one such certificate relating to all documents referred to in paragraph (2) suffices and the foregoing statement need not be qualified on account of the difference permitted by paragraph (a) as to the form of a signature or of a date).

(5) Section 376 of the Companies Act 2014 shall apply to a company to which this Regulation applies as if the following subsection were substituted for subsection (1):

“(1) This section has effect where the directors of an investment company to which Regulation 42A of the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations 2011 (S.I. No. 352 of 2011) (inserted by section 100 of the Companies (Accounting) Act 2017) applies have prepared revised financial statements or a revised directors’ report under section 367 and a copy of the original statutory financial statements or directors’ report, has been delivered to the Registrar under that Regulation.”.

(6) If an investment company to which this Regulation applies fails to comply with the requirements of this Regulation, the company and any officer of it who is in default is guilty of an offence.

(7) A person guilty of an offence under paragraph (6) is liable, on summary conviction, to a class A fine or imprisonment for a term not exceeding 6 months or to both.

(8) In this Regulation ‘Registrar’ means ‘Registrar of Companies’.”,

and

(b) by the substitution of the following Regulation for Regulation 93:

“93. (1) The accounting information given in the annual report shall be audited—

(a) in accordance with Directive 2006/43/EC of the European Parliament and of the Council of 17 May 2006[^8] as amended by Directive 2014/56/EU of the European Parliament and of the Council of 16 April 2014[^9] on statutory audits of annual accounts and consolidated accounts, and

(b) by one or more persons empowered by law to audit accounts in accordance with the Companies Act 2014.

(2) The auditor’s report, including any qualifications, shall be reproduced in full in the annual report.

(3) The form of the auditor’s report shall comply with the requirements of section 336 of the Companies Act 2014 subject to the modification that references in that section to a company shall be construed as references to a UCITS.”.

101. Amendment of European Union (Alternative Investment Fund Managers) Regulations 2013

101. The European Union (Alternative Investment Fund Managers) Regulations 2013 (S.I. No. 257 of 2013) are amended, in Regulation 23—

(a) by the insertion of the following paragraph after paragraph (4):

“(4A) The form of the auditor’s report shall comply with—

(a) the requirements of section 336 of the Companies Act 2014 in the case of an Irish AIF, or

(b) the relevant law transposing Directive 2006/43/EC of the home Member State of the AIF, in the case of an EU AIF,

subject to the modification that references to a company shall be construed as references to an AIF.”,

and

(b) in paragraph (5), by the substitution of “By way of derogation from paragraph (4) and (4A)” for “By way of derogation from paragraph (4)”.

SCHEDULE 1

SCHEDULE 3

ACCOUNTING PRINCIPLES, FORM AND CONTENT OF ENTITY FINANCIAL STATEMENTS

PART I

CONSTRUCTION OF REFERENCES TO PROVISIONS OF SCHEDULES

(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

(c) a reference in this Schedule to a subparagraph or clause is a reference to the subparagraph or clause of the provision in which the reference occurs, unless it is indicated that a reference to some other enactment is intended.

(2) Provisions providing for the interpretation of certain expressions appearing in this Schedule are contained in Part VI.

PART II

GENERAL RULES AND FORMATS

SECTION A

GENERAL RULES

(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,

in either case in the order and under the headings and sub-headings given in the format adopted.

(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—

(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.

(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).

(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.

(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

(c) costs of research.

(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

(b) in any case where the combination of such items facilitates that assessment.

(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.

(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).

(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.

(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.

SECTION B

THE REQUIRED FORMATS FOR FINANCIAL STATEMENTS

Preliminary

(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.

BALANCE SHEET FORMATS

Format 1

ASSETS

A. Fixed Assets

I. Intangible assets

II. Tangible assets

III. Financial assets

B. Current Assets

I. Stocks

II. Debtors (3)

III. Investments

IV. Cash at bank and in hand

C. Creditors: Amounts falling due within one year

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

H. Capital and reserves

I. Called-up share capital presented as equity (8)

II. Share premium account

III. Revaluation reserve

IV. Other reserves

V. Profit or loss brought forward (10)

VI. Profit or loss for the financial year (10).

Format 2

ASSETS

A. Fixed Assets

I. Intangible assets

II. Tangible assets

III. Financial assets

B. Current Assets

I. Stocks

II. Debtors (3)

III. Investments

IV. Cash at bank and in hand

CAPITAL, RESERVES AND LIABILITIES

A. Capital and reserves

I. Called-up share capital presented as equity (8)

II. Share premium account

III. Revaluation reserve

IV. Other reserves

V. Profit or loss brought forward (10)

VI. Profit or loss for the financial year (10)

B. Provisions for liabilities

C. Creditors (9)

NOTES ON THE BALANCE SHEET FORMATS

(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—

(a) the assets were acquired for valuable consideration and are not required to be shown under goodwill, or

(b) the assets in question were created by the company itself.

(2) Goodwill

(Formats 1 and 2, items A. I. 3)

Amounts representing goodwill shall only be included to the extent that the goodwill was acquired for valuable consideration.

(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.

PROFIT AND LOSS ACCOUNT FORMATS

Format 1 (15)

Format 2

(b) Other external expenses

(a) Wages and salaries

(b) Social insurance costs

(c) Other retirement benefit costs

(d) Other compensation costs

(b) Value adjustments in respect of current assets to the extent they exceed value adjustments that are normal in the undertaking concerned

NOTES ON THE PROFIT AND LOSS ACCOUNT FORMATS

(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)

Income and interest derived from group undertakings shall be shown separately from income and interest derived from other sources.

(13) Interest payable and similar expenses

(Format 1, item 12; Format 2, item 14)

The amount payable to group undertakings shall be shown separately.

(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.

PART III

ACCOUNTING PRINCIPLES AND VALUATION RULES

SECTION A

ACCOUNTING PRINCIPLES

Preliminary

Accounting principles

(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.

Departure from the accounting principles

SECTION B

HISTORICAL COST ACCOUNTING RULES

Preliminary

FIXED ASSETS

General Rules

Rules for depreciation and diminution in value

(a) its purchase price or production cost, or

(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.

(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.

Rules for determining particular fixed asset items

(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—

(a) the period over which the amount of those costs originally capitalised is being or is to be written off, and

(b) the reasons for capitalising the costs in question.

(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).

CURRENT ASSETS

(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.

MISCELLANEOUS

Excess of money owed over value received as an asset item

(2) Where any such amount exists—

(a) it shall be written off by reasonable amounts each year and shall be completely written off before repayment of the debt, and

(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.

DETERMINATION OF PURCHASE PRICE OR PRODUCTION COST

(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.

(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.

SECTION C

ALTERNATIVE ACCOUNTING RULES

Preliminary

(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.

Alternative accounting rules

(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.

Application of depreciation rules

(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.

Additional information in case of departure from historical cost accounting rules

(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—

(a) the aggregate amount which would be required to be shown in respect of that item if the amounts to be included in respect of all the assets covered by that item were determined according to the historical cost accounting rules, and

(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.

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,

or

(b) to or from the revaluation reserve in respect of the taxation relating to any profit or loss credited or debited to the reserve,

and the revaluation reserve shall be reduced to the extent that the amounts transferred to it are no longer necessary for the purpose of the valuation methods used.

(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.

(5) The revaluation reserve shall not be reduced except as mentioned in this paragraph.

(6) The treatment for taxation purposes of amounts credited or debited to the revaluation reserve shall be disclosed in a note to the financial statements.

Accounting for certain participating interests in entity financial statements