The Companies (1986 Order) (International Accounting Standards and Other Accounting Amendments) Regulations (Northern Ireland) 2004

(50A) There must be stated – (a) any amount set aside or proposed to be set aside to, or withdrawn or proposed to be withdrawn from, reserves, (b) the aggregate amount of dividends paid in the financial year (other than those for which a liability existed at the immediately preceding balance sheet date), (c) the aggregate amount of dividends that the company is liable to pay at the balance sheet date, and (d) the aggregate amount of dividends that are proposed before the date of approval of the accounts, and not otherwise disclosed under sub-paragraph (b) or (c).

• (3) After paragraph 58 insert –

(58A) (1) This paragraph applies where financial instruments have been valued in accordance with paragraph 44A or 44C. (2) There must be stated – (a) where the fair value of the instruments has been determined in accordance with paragraph 44B(4), the significant assumptions underlying the valuation models and techniques used, (b) for each category of financial instrument, the fair value of the instruments in that category and the changes in value – (i) included in the profit and loss account, and (ii) credited to or (as the case may be) debited from the fair value reserve, in respect of those instruments, and (c) for each class of derivatives, the extent and nature of the instruments, including significant terms and conditions that may affect the amount, timing and certainty of future cash flows. (3) Where any amount is transferred to or from the fair value reserve during the financial year, there must be stated in tabular form – (a) the amount of the reserve as at the date of the beginning of the financial year and as at the balance sheet date respectively; (b) the amount transferred to or from the reserve during that year; and (c) the source and application respectively of the amounts so transferred. (58B) Where the company has derivatives that it has not included at fair value, there must 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 44B, and (b) the extent and nature of the derivatives. (58C) (1) Sub-paragraph (2) applies if – (a) the company has financial fixed assets that could be included at fair value by virtue of paragraph 44A, (b) the amount at which those assets are included under any item in the company’s accounts is in excess of their fair value, and (c) the company has not made provision for diminution in value of those assets in accordance with paragraph 26(1). (2) There must be stated – (a) the amount at which either the individual assets or appropriate groupings of those individual assets are included in the company’s accounts, (b) the fair value of those assets or groupings, and (c) the reasons for not making a provision 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 accounts will be recovered. (58D) (1) This paragraph applies where the amounts to be included in a company’s accounts in respect of investment property or living animals and plants have been determined in accordance with paragraph 44D. (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 must be disclosed in a note to the accounts. (3) In the case of investment property, for each balance sheet item affected there must be shown, either separately in the balance sheet or in a note to the accounts – (a) the comparable amounts determined according to the historical cost accounting rules; or (b) the differences between those amounts and the corresponding amounts actually shown in the balance sheet in respect of that item. (4) In sub-paragraph (3), references in relation to any item to the comparable amounts determined in accordance with that sub-paragraph 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 provisions for depreciation or diminution in value which would be permitted or required in determining those amounts according to those rules.

• (4) In paragraph 59(1) (transfers to and from reserves and provisions) –

• (a) in sub-paragraph (b), for “provisions for liabilities and charges” substitute “provisions for liabilities”, and

• (b) in sub-paragraph (c), for “provision for liabilities and charges” substitute “provision for liabilities”.

9

• (1) Chapter IV (interpretation of Part I) is amended as follows.

• (2) In paragraph 82 (general interpretation), at the appropriate place, insert –

• “Investment property” means land held to earn rent or for capital appreciation;

• (3) After paragraph 82 insert –

(82A) For the purposes of this Part, references to “derivatives” include commodity-based contracts that give either contracting party the right to settle in cash or in some other financial instrument, except when such contracts – (a) were entered into for the purpose of, and continue to meet, the company’s expected purchase, sale or usage requirements, (b) were designed for such purpose at their inception, and (c) are expected to be settled by delivery of the commodity. (82B) (1) The expressions listed in sub-paragraph (2) have the same meaning in paragraphs 44A to 44F, 58A to 58C and 82A of this Part as they have in Council Directives 78/660/EEC on the annual accounts of certain types of companies and 86/635/EEC on the annual accounts and consolidated accounts of banks and other financial institutions, as amended[^f00060]. (2) Those expressions are “available for sale financial asset”, “business combination”, “commodity-based contracts”, “derivative”, “equity instrument”, “exchange difference”, “fair value hedge accounting system”, “financial fixed asset”, “financial instrument”, “foreign entity”, “hedge accounting”, “hedge accounting system”, “hedged items”, “hedging instrument”, “held for trading purposes”, “held to maturity”, “monetary item”, “receivables”, “reliable market” and “trading portfolio”.

• (4) In paragraph 85(c) (interpretation of references to provisions for liabilities or charges) –

• (a) for “provisions for liabilities or charges” substitute “provisions for liabilities”, and

• (b) for “or loss” substitute “the nature of which is clearly defined and”.

SCHEDULE 6 — FORM AND CONTENT OF ACCOUNTS OF INSURANCE COMPANIES AND GROUPS

1

Part I of Schedule 9A to the 1986 Order (form and content of accounts of insurance companies and groups) is amended as follows.

2

Omit paragraph 5 (dividends in profit and loss account to be shown as separate items)[^f00061].

3

After paragraph 6 insert –

(6A) The directors of a company must, in determining how amounts are presented within items in the profit and loss account and balance sheet, have regard to the substance of the reported transaction or arrangement, in accordance with generally accepted accounting principles or practice.

4

In the Balance Sheet Format, under the heading “LIABILITIES”, for “Provisions for other risks and charges” substitute “Provisions for other risks”.

5

In paragraph 16(b) (extent to which liabilities and losses to be taken into account) omit “and losses” and “or are likely to arise”.

6

• (1) After paragraph 19 insert –

(19A) (1) The amounts to be included in respect of assets of any description mentioned in paragraph 22 (valuation of assets: general) are determined either – (a) in accordance with that paragraph and paragraph 24 (but subject to paragraphs 27 to 29); or (b) so far as applicable to an asset of that description, in accordance with section BA (valuation at fair value). (2) The amounts to be included in respect of assets of any description mentioned in paragraph 23 (alternative valuation of fixed-income securities) may be determined – (a) in accordance with that paragraph (but subject to paragraphs 27 to 29); or (b) so far as applicable to an asset of that description, in accordance with section BA. (3) The amounts to be included in respect of assets which – (a) are not assets of a description mentioned in paragraph 22 or 23, but (b) are assets of a description to which section BA is applicable, may be determined in accordance with that section. (4) Subject to sub-paragraphs (1) to (3), the amounts to be included in respect of all items shown in a company’s accounts are determined in accordance with section C.

• (2) Omit paragraph 20 (preliminary paragraph on current value accounting rules).

7

• (1) In Chapter II (accounting principles and rules), after paragraph 29 insert –

(29A) (1) Subject to sub-paragraphs (2) to (4), financial instruments (including derivatives) may be included at fair value. (2) Sub-paragraph (1) does not apply to financial instruments which constitute liabilities unless – (a) they are held as part of a trading portfolio, or (b) they are derivatives. (3) Except where they fall to be included under Assets item D (assets held to cover linked liabilities), sub-paragraph (1) does not apply to – (a) financial instruments (other than derivatives) held to maturity; (b) loans and receivables originated by the company and not held for trading purposes; (c) interests in subsidiary undertakings, associated undertakings and joint ventures; (d) equity instruments issued by the company; (e) contracts for contingent consideration in a business combination; (f) other financial instruments with such special characteristics that the instruments, according to generally accepted accounting principles or practice, should be accounted for differently from other financial instruments. (4) If the fair value of a financial instrument cannot be determined reliably in accordance with paragraph 29B, sub-paragraph (1) does not apply to that financial instrument. (5) In this paragraph – - “associated undertaking” has the meaning given by paragraph 20 of Schedule 4A; and - “joint venture” has the meaning given by paragraph 19 of that Schedule. (29B) (1) The fair value of a financial instrument is determined in accordance with this paragraph. (2) If a reliable market can readily be identified for the financial instrument, its fair value is determined by reference to its market value. (3) If a reliable market cannot readily be identified for the financial instrument but can be identified for its components or for a similar instrument, its fair value is determined by reference to the market value of its components or of the similar instrument. (4) If neither sub-paragraph (2) nor (3) applies, the fair value of the financial instrument is a value resulting from generally accepted valuation models and techniques. (5) Any valuation models and techniques used for the purposes of sub-paragraph (4) must ensure a reasonable approximation of the market value. (29C) A company may include any assets and liabilities that qualify as hedged items under a fair value hedge accounting system, or identified portions of such assets or liabilities, at the amount required under that system. (29D) (1) This paragraph applies to – (a) investment property, and (b) living animals and plants, that, under international accounting standards, may be included in accounts at fair value. (2) Such investment property and such living animals and plants may be included at fair value, provided that all such investment property or, as the case may be, all such living animals and plants are so included where their fair value can reliably be determined. (3) In this paragraph, “fair value” means fair value determined in accordance with relevant international accounting standards. (29E) (1) This paragraph applies where a financial instrument is valued in accordance with paragraph 29A or 29C or an asset is valued in accordance with paragraph 29D. (2) Notwithstanding paragraph 16, and subject to sub-paragraphs (3) and (4), a change in the value of the financial instrument or of the investment property or living animal or plant must be included in the profit and loss account. (3) Where – (a) the financial instrument accounted for is a hedging instrument under a hedge accounting system that allows some or all of the change in value not to be shown in the profit and loss account, or (b) the change in value relates to an exchange difference arising on a monetary item that forms part of a company’s net investment in a foreign entity, the amount of the change in value must be credited to or (as the case may be) debited from a separate reserve (“the fair value reserve”). (4) Where the instrument accounted for – (a) is an available for sale financial asset, and (b) is not a derivative, the change in value may be credited to or (as the case may be) debited from the fair value reserve. (29F) (1) The fair value reserve must be adjusted to the extent that the amounts shown in it are no longer necessary for the purposes of paragraph 29E(3) or (4). (2) The treatment for taxation purposes of amounts credited to or debited from the fair value reserve shall be disclosed in a note to the accounts.

• (2) Omit paragraph 30 (preliminary paragraph on historical cost accounting rules).

8

• (1) Chapter III (notes to the accounts) is amended as follows.

• (2) After paragraph 57 insert –

(57A) There must be stated – (a) any amount set aside or proposed to be set aside to, or withdrawn or proposed to be withdrawn from, reserves, (b) the aggregate amount of dividends paid in the financial year (other than those for which a liability existed at the immediately preceding balance sheet date), (c) the aggregate amount of dividends that the company is liable to pay at the balance sheet date, and (d) the aggregate amount of dividends that are proposed before the date of approval of the accounts, and not otherwise disclosed under sub-paragraph (b) or (c).

• (3) After paragraph 65 (information supplementing the balance sheet)[^f00062] insert –

(65A) (1) This paragraph applies where financial instruments have been valued in accordance with paragraph 29A or 29C. (2) The items affected and the basis of valuation adopted in determining the amounts of the financial instruments must be disclosed. (3) The purchase price of the financial instruments must be disclosed. (4) There must be stated – (a) where the fair value of the instruments has been determined in accordance with paragraph 29B(4), the significant assumptions underlying the valuation models and techniques used, (b) for each category of financial instrument, the fair value of the instruments in that category and the changes in value – (i) included in the profit and loss account, or (ii) credited to or (as the case may be) debited from the fair value reserve, in respect of those instruments, and (c) for each class of derivatives, the extent and nature of the instruments, including significant terms and conditions that may affect the amount, timing and certainty of future cash flows. (5) Where any amount is transferred to or from the fair value reserve during the financial year, there must be stated in tabular form – (a) the amount of the reserve as at the date of the beginning of the financial year and as at the balance sheet date respectively; (b) the amount transferred to or from the reserve during that year; and (c) the source and application respectively of the amounts so transferred. (65B) Where the company has derivatives that it has not included at fair value, there must 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 29B, and (b) the extent and nature of the derivatives. (65C) (1) Sub-paragraph (2) applies if – (a) the company has financial fixed assets that could be included at fair value by virtue of paragraph 29A, (b) the amount at which those assets are included under any item in the company’s accounts is in excess of their fair value, and (c) the company has not made provision for diminution in value of those assets in accordance with paragraph 33(2). (2) There must be stated – (a) the amount at which either the individual assets or appropriate groupings of those individual assets are included in the company’s accounts, (b) the fair value of those assets or groupings, and (c) the reasons for not making a provision 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 accounts will be recovered. (65D) (1) This paragraph applies where the amounts to be included in a company’s accounts in respect of investment property or living animals and plants have been determined in accordance with paragraph 29D. (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 must be disclosed in a note to the accounts. (3) In the case of investment property, for each balance sheet item affected there must be shown, either separately in the balance sheet or in a note to the accounts – (a) the comparable amounts determined according to the historical cost accounting rules; or (b) the differences between those amounts and the corresponding amounts actually shown in the balance sheet in respect of that item. (4) In sub-paragraph (3), references in relation to any item to the comparable amounts determined in accordance with that sub-paragraph 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 provisions or depreciation or diminution in value which would be permitted or required in determining those amounts according to those rules.

• (4) In paragraph 66(1)(b) and (c) (transfers to or from provisions)[^f00063], for “provisions for other risks and charges” substitute “provisions for other risks”.

9

• (1) Chapter IV (interpretation of Part I) is amended as follows.

• (2) In paragraph 81 (general interpretation)[^f00064], at the appropriate place, insert –

• “investment property” means land held to earn rent or for capital appreciation;

• (3) After paragraph 81 insert –

(81A) For the purposes of this Part, references to “derivatives” include commodity-based contracts that give either contracting party the right to settle in cash or some other financial instrument, except when such contracts – (a) were entered into for the purpose of, and continue to meet, the company’s expected purchase, sale or usage requirements, (b) were designated for such purpose at their inception, and (c) are expected to be settled by delivery of the commodity. (81B) (1) The expressions listed in sub-paragraph (2) have the same meaning in section BA of Chapter II and paragraphs 65A to 65C and 81A as they have in Council Directives 78/660/EEC on the annual accounts of certain types of companies and 91/674/EEC on the annual accounts and consolidated accounts of insurance undertakings, as amended[^f00065]. (2) Those expressions are “available for sale financial asset”, “business combination”, “commodity-based contracts”, “derivatives”, “equity instrument”, “exchange difference”, “fair value hedge accounting system”, “financial fixed asset”, “financial instrument”, “foreign entity”, “hedge accounting”, “hedge accounting system”, “hedge items”, “hedging instrument”, “held for trading purposes”, “held to maturity”, “monetary item”, “receivables”, “reliable market” and “trading portfolio”.

• (4) In paragraph 84(c) (interpretation of references to provisions for risks and charges)[^f00066] –

• (a) for “provisions for other risks and charges” substitute “provisions for other risks”, and

• (b) for “or loss” substitute “the nature of which is clearly defined and”.

SCHEDULE 7 — MINOR AND CONSEQUENTIAL AMENDMENTS

PART I — amendments of the companies (northern ireland) order 1986

1

The following minor and consequential amendments to the 1986 Order have effect.

2

In Article 162(2) (definition of “net assets” for Chapter VI of Part VI), for “provision for liabilities or charges” substitute “provision for liabilities”.

3

In Article 164(2)(b) (definition of “liabilities” for the purposes of the “net asset” test) for “or loss” substitute “the nature of which is clearly defined and”.

4

• (1) Article 236 (exemption for parent companies included in accounts of larger group) is amended as follows.

• (2) In paragraphs (1) and (2)(a) for “a member State of the European Economic Community” substitute “an EEA State”.

• (3) In paragraph (3), omit from “listed” to the end, and substitute “admitted to trading on a regulated market of any EEA State within the meaning of Council Directive 93/22/EEC on investment services in the securities field”.

5

In Article 239(5)(b) (disclosure required in notes to accounts of undertakings excluded from consolidation)[^f00067], omit “or (4)”.

6

Omit Article 251 (accounts of subsidiary undertakings to be appended in certain cases)[^f00068].

7

In Article 268 (definition of “participating interest”)[^f00069], omit paragraph (5).

8

In Article 272(2) (restriction on distribution of assets), for “provision for liabilities or charges” substitute “provision for liabilities”.

9

In Article 273(2) (other distributions by investment companies), for “provision for liabilities or charges” substitute “provision for liabilities”.

10

In Schedule 4A (interests in subsidiary undertakings excluded from consolidation)[^f00070], omit paragraph 18.

11

In paragraph 25 of Schedule 6 (disclosure of information: emoluments and other benefits of directors and others), for “provisions for liabilities or charges” substitute “provisions for liabilities”.

12

In Part II of Schedule 9 (undertakings to be included in consolidation), omit paragraph 1.

PART II — amendments of other statutory provisions

13

In the Government Resources and Accounts Act (Northern Ireland) 2001[^f00071], in –

• (a) section 9(4)(a) (accounts of government departments), and

• (b) section 14(5)(a) (whole of government accounts),

after “(accounting standards)” insert “or to the international accounting standards, within the meaning of EC Regulation No. 1606/2002 of the European Parliament and of the Council of 19th July 2002 on the application of international accounting standards, adopted from time to time by the European Commission in accordance with that Regulation”.

Signed

Sealed with the Official Seal of the Department of Enterprise, Trade and Investment on 2nd December 2004.

M. Bohill — A senior officer of the — Department of Enterprise, Trade and Investment

Explanatory note

(This note is not part of the Regulations.)

These Regulations amend Part VIII of the Companies (Northern Ireland) Order 1986 (“the 1986 Order”) on accounts and audit in order to –

• ensure the effective application of, and implement Member State options in, EC Regulation No. 1606/2002 of the European Parliament and of the Council of 19th July 2002 on the application of international accounting standards (Official Journal No. L243/1 of 11th September 2002) (“the IAS Regulation”);

• implement Directive 2001/65/EC of the European Parliament and of the Council of 27th September 2001 amending Directives 78/660/EEC, 83/349/EEC and 86/635/EEC as regards the valuation rules for the annual and consolidated accounts of certain types of companies as well as of banks and other financial institutions (Official Journal No. L283/28 of 27th October 2001) (“the Fair Value Directive”);

• implement Directive 2003/51/EEC of the European Parliament and of the Council of 18th June 2003 amending Directives 78/660/EEC, 83/349/EEC, 86/635/EEC and 91/674/EEC on the annual and consolidated accounts of certain types of companies, banks and other financial institutions and insurance undertakings (Official Journal No. L178/16 of 17th July 2003) (“the Accounts Modernisation Directive”) (with the exception of Articles 1.14, 1.17 (in part) and 2.10).

They also make certain other minor and consequential amendments to the 1986 Order and to other statutory provisions.

Part 1 of the Regulations (regulation 1) is introductory, and includes provision applying the Regulations to companies' financial years beginning on or after 1st January 2005.

Part 2 of the Regulations (regulations 2 and 3 and Schedule 1) amends Part VIII of the 1986 Order in order to give full effect to the requirement in Article 4 of the IAS Regulation that companies whose securities are admitted to trading on a regulated market prepare their consolidated accounts in accordance with international accounting standards adopted pursuant to the Regulation. Article 4 defines regulated markets as having the meaning specified in Article 1(13) of Council Directive 93/22/EEC of 10th May 1993 on investment services in the securities field (Official Journal No. L141/27 of 11th June 1993).

Part 2 of the Regulations also implements the Member State option in Article 5 of the IAS Regulation by permitting (subject to certain conditions) –

• companies governed by Article 4 (other than charitable companies) also to prepare their individual accounts, and

• all other companies (again with the exception of charitable companies) to prepare their individual and consolidated accounts

using adopted international accounting standards (see the definition of “international accounting standards” inserted into Article 270 of the 1986 Order by paragraph 22(2)(d) of Schedule 1).

Part 3 of the Regulations (regulations 4 to 15 and Schedules 2 to 7) contains the following further modifications of Part VIII of the 1986 Order –

• regulation 4 inserts a new Article 236A conferring an exemption from the obligation to prepare group accounts on a parent company that is included in group accounts drawn up by a parent undertaking that is not established under the law of a State that is a member of the European Economic Area. This implements the Member State option in Article 11 of the 7th Council Directive 83/349/EEC of 13th June 1983 on consolidated accounts (Official Journal No. L193/1 of 18th July 1983);

• regulation 5 amends Article 237 of the 1986 Order in implementation of Article 2.6 of the Accounts Modernisation Directive. It repeals Article 237(4) which provided for a parent company to exclude a subsidiary undertaking from the parent’s consolidated accounts if that undertaking’s activities were so different from those of other undertakings to be included in the consolidation that its inclusion would be incompatible with the obligation to give a true and fair view;

• regulations 6 to 8 amend Articles 243, 244 and 248 of the 1986 Order on the auditors' report to implement Articles 1.15 to 1.18 and 2.11 of the Accounts Modernisation Directive;

• regulation 9 amends Article 252 of the 1986 Order to remove the ability for directors to extend by 3 months the period allowed for laying and delivering accounts and reports where the company has interests outside the United Kingdom, etc.;

• regulation 10 amends Article 253 of the 1986 Order to permit voluntary revision by directors of a company of a summary financial statement prepared under Article 259 of the 1986 Order;

• regulation 11 amends Article 259 of the 1986 Order to extend the power of the Department of Enterprise, Trade and Investment to make regulations for companies to send out summary financial statements in place of the full accounts and reports so that such regulations are capable of applying to all companies, and not just to listed companies;

• regulation 12 amends Article 266 of the 1986 Order to remove the requirement in Article 266(4) for a participating interest to exist in order for an undertaking to be a subsidiary undertaking, and otherwise to extend the circumstances in which a parent-subsidiary undertaking relationship exists. This implements Article 2.1 of the Accounts Modernisation Directive. The amendment is extended to the Building Societies Act 1986 and the Financial Services and Markets Act 2000;

• regulation 13 modifies Schedule 7 to the 1986 Order (disclosures to be made in directors' report) to implement the Fair Value Directive requirement for disclosures in relation to the use of financial instruments by a company and its subsidiary undertakings. Small companies are exempt from this requirement (see the amendment to Article 254(4) of the 1986 Order in regulation 13(2)).

Regulation 14 introduces Schedules 2 to 6 to the Regulations which amend Schedules 4 (form and content of company accounts), 8 (form and content of accounts prepared by small companies), 8A (form and content of abbreviated accounts of small companies), 9 (form and content of accounts of banking companies and groups) and 9A (form and content of accounts of insurance companies and groups) to the 1986 Order.

Paragraphs 2 and 6(2) of Schedule 2 amend the rules in Schedule 4 to the 1986 Order on the disclosure of dividends in company accounts. Equivalent amendments are made to Schedules 8, 9 and 9A to the 1986 Order by paragraphs 2 and 6(2) of Schedule 3, paragraphs 2 and 8(2) of Schedule 5 and paragraphs 2 and 8(2) of Schedule 6 respectively.

Paragraph 3 of Schedule 2 implements Article 1.2 of the Accounts Modernisation Directive by requiring that amounts be presented within items in the profit and loss account and balance sheet having regard to the substance of the reported transaction. Equivalent amendments are made to Schedules 8, 9 and 9A to the 1986 Order by paragraphs 3 of Schedules 3, 5 and 6.

Paragraphs 4, 5(2), 6(4), 7(2) and 8(4) of Schedule 2 implement Articles 1.4, 1.5, 1.7, 1.9 and 1.11 of the Accounts Modernisation Directive by making minor changes to the terminology of the 1986 Order relating to “provisions”. Equivalent amendments are made to Schedules 8, 8A, 9 and 9A to the 1986 Order by paragraphs 4, 5(2), 6(4) and 7(4) of Schedule 3, paragraph 2 of Schedule 4, paragraphs 4, 5, 8(4) and 9(4) of Schedule 5 and paragraphs 4, 5, 8(4) and 9(4) of Schedule 6 respectively.

Paragraph 5(4) of Schedule 2 inserts a new section D in Part II of Schedule 4 to the 1986 Order in order to implement the Fair Value Directive and Article 1.12 of the Accounts Modernisation Directive. New section D permits a company to include certain financial instruments (including derivatives), and investment property, living animals and plants in its accounts at fair value. It specifies –

• the type of financial instrument and other assets that may be fair valued,

• the methods for determining fair value,

• how assets and liabilities that qualify as hedged items under a fair value hedge accounting system are to be accounted for, and

• how changes in the value of financial instruments are to be accounted for.

Paragraph 6(3) of Schedule 2 requires information about fair valuation of financial instruments investment property and living animals and plants to be given in the notes to a company’s accounts, including where a company has chosen not to fair value its financial instruments. Paragraph 8(2) and (3) inserts definitions of relevant terms.

Equivalent modifications on fair valuation are made to –

• Schedule 8 and 8A (small company accounts – see paragraphs 5(4), 6(3), 7(2) and 7(3) of Schedule 3 and paragraph 3 of Schedule 4),

• Schedule 9 (banking company accounts – see paragraphs 6, 7, 8(3), 9(2) and 9(3) of Schedule 5), and

• Schedule 9A (insurance company accounts – see paragraphs 6, 7, 8(3), 9(2) and 9(3) of Schedule 6).

Finally, regulation 15 of, and Schedule 7 to, the Regulations make minor and consequential amendments to the 1986 Order and to other statutory provisions.

Footnotes

[^f00001]: Formerly the Department of Economic Development: see S.I. 1999/283 (N.I. 1), Article 3(5)

[^f00002]: S.I. 1986/1032 (N.I. 6); Article 265 was inserted into the 1986 Order by Article 22 of the Companies (Northern Ireland) Order 1990 (S.I. 1990/593 (N.I. 5)) in place of an existing Article of that number

[^f00003]: Article 234 was inserted into the 1986 Order by Article 6 of the Companies (Northern Ireland) Order 1990 in place of an existing Article of that number, and Article 235 by Article 7 of that Order

[^f00004]: O.J. No. L141 of 11.6.1993 page 27, as last amended by Directive 2000/64/EEC of the European Parliament and of the Council (O.J. No. L290 of 17.11.2000, page 27)

[^f00005]: Article 237 was inserted into the 1986 Order by Article 7 of the Companies (Northern Ireland) Order 1990 in place of an existing Article of that number

[^f00006]: Article 243 was inserted into the 1986 Order by Article 11 of the Companies (Northern Ireland) Order 1990 in place of an existing Article of that number

[^f00007]: Article 244 was inserted into the 1986 Order by Article 11 of the Companies (Northern Ireland) Order 1990 in place of an existing Article of that number

[^f00008]: Article 248 was inserted into the 1986 Order by Article 12 of the Companies (Northern Ireland) Order 1990 in place of an existing Article of that number, and amended by S.R. 1995 No. 128

[^f00009]: Article 252 was inserted into the 1986 Order by Article 13 of the Companies (Northern Ireland) Order 1990 in place of an existing Article of that number

[^f00010]: Article 253 was inserted into the 1986 Order by Article 14 of the Companies (Northern Ireland) Order 1990 in place of an existing Article of that number, and amended by S.R. 1995 No. 128

[^f00011]: Article 259 was inserted into the 1986 Order by Article 17 of the Companies (Northern Ireland) Order 1990 in place of an existing Article of that number, and amended by S.R. 1993 No. 220, S.I. 2001/3649 and S.R. 2003 No. 3

[^f00012]: Article 266 was inserted into the 1986 Order by Article 23 of the Companies (Northern Ireland) Order 1990 in place of an existing Article of that number

[^f00013]: 1986 c. 53 (as amended by the Companies (No. 2) (Northern Ireland) Order 1990 (S.I. 1990/1504 (N.I. 10)) and the Building Societies Act 1997 (c. 32))

[^f00014]: 2000 c. 8

[^f00015]: The paragraph in Schedule 7 previously numbered 5A was repealed by S.R. 1997 No. 314

[^f00016]: O.J. No. L222 of 14.8.1978 page 11 and O.J. L193 of 18.7.1983 page 1, as amended in particular by Directives 2001/65/EEC and 2003/51/EEC of the European Parliament and of the Council (O.J. No. L238 of 27.10.2001, page 28, and O.J. No. L178 of 17.7.2003, page 16)

[^f00017]: Article 254 was inserted into the 1986 Order by S.R. 1997 No. 436 in place of an existing Article of that number, and amended by S.R. 1997 No. 545 and S.R. 2001 No. 153

[^f00018]: Schedule 4 was amended by Article 6(2) of, and Schedule 1 to, the Companies (Northern Ireland) Order 1990

[^f00019]: Schedule 8 was substituted by S.R. 1997 No. 436

[^f00020]: Schedule 8A was inserted into the 1986 Order by S.R. 1997 No. 436

[^f00021]: Parts I to III of Schedule 9 were inserted before a re-numbered Schedule 9A by S.R. 1992 No. 258. Part IV of Schedule 9 was substituted by Article 20(3) and (4) of, Part IV of Schedule 7 to, the Companies (Northern Ireland) Order 1990

[^f00022]: Parts I and II of Schedule 9 to the 1986 Order were formed into a new Schedule 9A by S.R. 1992 No. 258. A new Schedule 9A was substituted by S.R. 1994 No. 428

[^f00023]: Article 2A was inserted into the 1986 Order by Article 78 of, and paragraph 1 of Schedule 5 to, the Companies (No. 2) (Northern Ireland) Order 1990 (S.I. 1990/1504 (N.I.10))

[^f00024]: Article 10 was substituted by Article 25 of, and paragraph 2 of Schedule 10 to, the Companies (Northern Ireland) Order 1990, and amended by S.R. 2003 No. 3

[^f00025]: Article 229 was inserted into the 1986 Order by Article 4 of the Companies (Northern Ireland) Order 1990 in place of an existing Article of that number

[^f00026]: Article 230 was inserted into the 1986 Order by Article 4 of the Companies (Northern Ireland) Order 1990 in place of an existing Article of that number

[^f00027]: Article 236 was inserted into the 1986 Order by Article 7(3) of the Companies (Northern Ireland) Order 1990, and amended by S.R. 1993 No. 199 and S.R. 1994 No. 428

[^f00028]: Article 237 was inserted into the 1986 Order by Article 7(3) of the Companies (Northern Ireland) Order 1990 in place of an existing Article of that number

[^f00029]: Article 238 was inserted into the 1986 Order by Article 7(3) of the Companies (Northern Ireland) Order 1990 in place of an existing Article of that number

[^f00030]: Article 241 was inserted into the 1986 Order by Article 9 of the Companies (Northern Ireland) Order 1990 in place of an existing Article of that number

[^f00031]: Articles 253 to 253C were inserted into 1986 Order by Article 14 of the Companies (Northern Ireland) Order 1990. Article 253 was amended by S.R. 1995 No. 128

[^f00032]: Article 254 was inserted into the 1986 Order by Article 15 of the Companies (Northern Ireland) Order 1990, subsequently substituted by S.R. 1997 No. 436, and amended by S.R. 1997 No. 545 and S.R. 2001 No. 153

[^f00033]: Article 254A was inserted into the 1986 Order by S.R. 1997 No. 436

[^f00034]: Article 255 was inserted into the 1986 Order by Article 15 of the Companies (Northern Ireland) Order 1990 in place of an existing Article of that number, and amended by S.R. 1992 No. 503, S.R. 1997 No. 314 and S.R. 1997 No. 436

[^f00035]: Article 256A was inserted into the 1986 Order by S.R. 1997 No. 436

[^f00036]: Article 257C was inserted into the 1986 Order by S.R. 1995 No. 128, and amended by S.R. 1997 No. 436 and S.R. 2001 No. 153

[^f00037]: Article 263 was inserted into the 1986 Order by Article 20 of the Companies (Northern Ireland) Order 1990 in place of an existing Article of that number, substituted by S.R. 1992 No. 258, and amended by S.R. 1994 No. 428

[^f00038]: Article 263A was inserted into the 1986 Order by Article 20 of the Companies (Northern Ireland) Order 1990, substituted by S.R. 1992 No. 258, and amended by S.R. 1993 No. 199, S.R. 1994 No. 428 and S.R. 1997 No. 314

[^f00039]: Article 269 was inserted into the 1986 Order by Article 24 of the Companies (Northern Ireland) Order 1990 in place of an existing Article of that number

[^f00040]: Article 270 was inserted into the 1986 Order by Article 24 of the Companies (Northern Ireland) Order 1990 in place of an existing Article of that number, and amended by S.R. 1993 No. 199, S.R. 1997 No. 314, S.I. 2002/765 and S.R. 2003 No. 3

[^f00041]: Official Journal of 11th September 2002 (O.J. L243)

[^f00042]: Article 270A was inserted into the 1986 Order by Article 24 of the Companies (Northern Ireland) Order 1990, and amended by S.R. 1992 No. 258, S.R. 1994 No. 428, S.R. 1995 No. 128, S.R. 1997 No. 314, S.R. 1997 No. 436 and S.R. 2003 No. 3

[^f00043]: Article 273 was amended by section 212 of, and paragraph 19 of Schedule 16 to, the Financial Services Act 1986 (c. 60), and by S.I. 2001/3649

[^f00044]: Article 276 was amended by S.R. 1997 No. 314 and S.I. 2001/3649

[^f00045]: Article 277 was amended by S.R. 1997 No. 436

[^f00046]: Article 280 was amended by Article 25 of, and paragraphs 7 and 8 of Schedule 10 to, the Companies (Northern Ireland) Order 1990

[^f00047]: Schedule 4 was amended by Article 6(2) of, and Schedule 1 to, the Companies (Northern Ireland) Order 1990

[^f00048]: Paragraph 25 and its internal cross-references were renumbered by Article 8(4) of, and paragraph 4 of Schedule 4 to, the Companies (Northern Ireland) Order 1990

[^f00049]: Paragraph 12 was inserted by S.R. 1997 No. 314 and substituted by S.R. 1997 No. 501

[^f00050]: Parts I to III of Schedule 9 were inserted before a re-numbered Schedule 9A by S.R. 1992 No. 258. Part IV of Schedule 9 was substituted by Article 20(3) and (4) of, and Part IV of Schedule 7 to, the Companies (Northern Ireland) Order 1990

[^f00051]: Parts I and II of Schedule 9 to the 1986 Order were formed into a new Schedule 9A by S.R. 1992 No. 258. A new Schedule 9A was substituted by S.R. 1994 No. 428

[^f00052]: Schedule 11 was amended by Article 25 of, and paragraph 24 of Schedule 10 to, the Companies (Northern Ireland) Order 1990, S.R. 1992 No. 258, S.R. 1994 No. 428 and S.R. 1997 No. 314

[^f00053]: Paragraph 3(7) was amended by S.R. 1997 No. 314

[^f00054]: Paragraph 45 was amended by S.R. 1997 No. 314

[^f00055]: O.J. No. L222 of 14.8.1978, page 11, as amended in particular by Directive 2001/65/EEC (O.J. No. L238 of 27.10.2001, page 28)

[^f00056]: Schedule 8 was substituted by S.R. 1997 No. 436

[^f00057]: O.J. No. L222 of 14.8.1978, page 11, as amended in particular by Directive 2001/65/EEC (O.J. No. L238 of 27.10.2001, page 28)

[^f00058]: Schedule 8A was inserted into the 1986 Order by S.R. 1997 No. 436

[^f00059]: Paragraph 8 was amended by S.R. 1997 No. 314

[^f00060]: O.J. No. L222 of 14.8.1978, page 11, and O.J. No. L372 of 31.12.1986, page 1, as amended in particular by Directive 2001/65/EEC (O.J. No. L238 of 27.10.2001, page 28)

[^f00061]: Paragraph 5 was amended by S.R. 1997 No. 314

[^f00062]: Paragraph 65 was amended by S.R. 1997 No. 314

[^f00063]: Paragraph 66 was amended by S.R. 1997 No. 314

[^f00064]: Paragraph 81 was amended by S.I. 2001/3649

[^f00065]: O.J. No. L222 of 14.8.1978, page 11, and O.J. No. L374 of 31.12.1991, page 7, as amended in particular by Article 4 of Directive 2003/51/EEC of the European Parliament and of the Council (O.J. No. L178 of 17.7.2003, page 16)

[^f00066]: Paragraph 84(c) was amended by S.R. 1997 No. 314

[^f00067]: Article 239 was inserted into the 1986 Order by Article 8 of the Companies (Northern Ireland) Order 1990 in place of an existing Article of that number and paragraph (5) was amended by S.R. 1997 No. 314

[^f00068]: Article 251 was inserted into the 1986 Order by Article 13 of the Companies (Northern Ireland) Order 1990 in place of an existing Article of that number

[^f00069]: Article 268 was inserted into the 1986 Order by Article 24 of the Companies (Northern Ireland) Order 1990 in place of an existing Article of that number and amended by S.R. 1994 No. 428 and S.R. 1997 No. 436

[^f00070]: Schedule 4A was inserted by Article 7(2) of, and Schedule 2 to, the Companies (Northern Ireland) Order 1990

[^f00071]: 2001 c. 6 (N.I.)