Applicable accounting standards meaning

In this issue: Economic Crime and Corporate Transparency Act Accounts and reports Corporate governance Equity Capital Markets Shareholders’ agreements Daily and weekly news alerts New and updated content Dates for your diary Trackers New Q&As Useful information Economic Crime and Corporate Transparency Act Companies House has deferred the roll-out of its authorised corporate service provider (ACSP) registration service, a component of the Economic Crime and Corporate Transparency Act (ECCTA) 2023 delivery plan. The schedule for this particular service will be reset, with a fresh launch date to follow, though springtime 2025 remains the anticipated window. See: LNB News 24/02/2025 42. Accounts and reports The Financial Reporting Council (FRC) has issued refreshed guidance on the ‘Going Concern Basis of Accounting and Related Reporting, including Solvency and Liquidity Risks’, following its August 2024 consultation. This non-binding material is intended to support company directors in meeting applicable legal and regulatory obligations when evaluating and...

FORTHCOMING CHANGE relating to the future withdrawal of DST : Following OECD-led talks that produced a political accord on a two‑pillar solution in October 2021, the UK reached an understanding with the US, Austria, France, Spain and Italy to move away from DST towards the new global tax regime, using a transitional DST credit system. Under the arrangement, the UK would retain DST receipts until Pillar One became operational and, once in force, companies could credit against future UK corporation tax the difference between DST paid from January 2022 and the amount that would have arisen had Pillar One applied instead. In exchange, the US, which regards digital services taxes as discriminatory towards US companies, agreed to withdraw proposed retaliatory tariffs on certain US imports from the other five countries, and undertook not to pursue additional trade measures against those states because of their digital services taxes until the interim period concluded. This understanding was subsequently extended by all six countries to 30 June 2024, from an original end...

FORTHCOMING CHANGE relating to the future withdrawal of DST : Following OECD-led talks culminating in a political accord on the two-pillar solution in October 2021, the UK reached an arrangement with the US, Austria, France, Spain and Italy to move away from the DST towards the new global tax framework, using a transitional DST credit mechanism. Under this arrangement, the UK would retain all DST receipts until Pillar One becomes operational and, once Pillar One applies, companies could offset against future UK corporation tax the difference between DST paid from January 2022 and the amount that would have been due had Pillar One applied instead, as credit against their future UK corporation tax bill. In exchange, the US—regarding digital services taxes as discriminatory towards US businesses—agreed to withdraw proposed retaliatory tariffs on certain US imports from the other five countries, and pledged to refrain from further trade measures against them over their digital services taxes for the length of the interim period. This understanding was prolonged by all six...

A company is generally understood to possess an implied authority to share its profits with its members, save where its articles of association state otherwise. A dividend constitutes one category of distribution that a company may make to its members; in practice, dividends are the distribution most frequently paid by companies. Any distribution must satisfy the requirements of Part 23 of the Companies Act 2006 (CA 2006), together with the applicable common law principles on distributions as adapted by that Part, if it is to be lawful. For an exploration of the legal framework and practical aspects of company distributions, see Practice Note: Distributions. For guidance on the ramifications of breaching the law on distributions, see Practice Note: Unlawful distributions. In ordinary usage, a ‘dividend’ means a portion of profits, whether at a fixed percentage or otherwise, apportioned to the holders of a company’s shares. The term is used for payments made to shareholders in their capacity as shareholders and not, for example, as remuneration for services...

Add the following new definitions in Article 2.1: Accounts • means, for each financial year of the Company, the audited [ consolidated ] balance sheet together with the profit and loss accounts of the Company and its subsidiary undertakings, prepared on the historical cost basis and in line with generally accepted accounting principles and all applicable accounting standards, Statements of Standard Accounting Practice, Financial Reporting Standards and Statements of Recommended Practice; After Tax Profit • means the amount of the profit [ (including any unrealised profits) ] of the Group for the relevant financial year (as shown by the Accounts): (a) before any provision or reserve has been made for or in respect of: i the payment of any dividend or other distribution on or in respect of any Shares or the transfer of any sum to reserves; ii the redemption of the [ Preferred Shares OR Loan Notes ]; and iii the amortisation or write-off of goodwill arising on consolidation; and (b) after provision has...