Companies Act 1985

The prospectus must state— As this paragraph applies for the purposes of section 72(3), sub-paragraph (1)(b) is to be read with the substitution for the reference to the company’s articles of a reference to its constitution. Sub-paragraphs (1)(b) and (1)(c) do not apply in the case of a prospectus issued more than 2 years after the date at which the company is entitled to commence business.

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The prospectus must state— In the case of a second or subsequent offer of shares, there must also be stated the amount offered for subscription on each previous allotment made within the 2 preceding years, the amount actually allotted and the amount (if any) paid on the shares so allotted, including the amount (if any) paid by way of premium.

There must be stated the number, description and amount of any shares in or debentures of the company which any person has, or is entitled to be given, an option to subscribe for. The following particulars of the option must be given— References in this paragraph to subscribing for shares or debentures include acquiring them from a person to whom they have been allotted or agreed to be allotted with a view to his offering them for sale.

The prospectus must state the number and amount of shares and debentures which within the 2 preceding years have been issued, or agreed to be issued, as fully or partly paid up otherwise than in cash; and—

For purposes of the following two paragraphs, “relevant property” is property purchased or acquired by the company, or proposed so to be purchased or acquired, But those two paragraphs do not apply to property—

As respects any relevant property, the prospectus must state—

There must be stated the amount (if any) paid or payable as purchase money in cash, shares or debentures for any relevant property, specifying the amount (if any) payable for goodwill.

The following applies for the interpretation of paragraphs 6, 7 and 8. Every person is deemed a vendor who has entered into any contract (absolute or conditional) for the sale or purchase, or for any option of purchase, of any property to be acquired by the company, in any case where— Where any property to be acquired by the company is to be taken on lease, paragraphs 6, 7 and 8 apply as if “vendor” included the lessor, “purchase money” included the consideration for the lease, and “sub-purchaser” included a sub-lessee. For purposes of paragraph 7, where the vendors or any of them are a firm, the members of the firm are not to be treated as separate vendors.

The prospectus must state— Sub-paragraph (1)(b) above, so far as it relates to preliminary expenses, does not apply in the case of a prospectus issued more than 2 years after the date at which the company is entitled to commence business.

The prospectus must give the dates of, parties to and general nature of every material contract. This does not apply to a contract entered into in the ordinary course of the business carried on or intended to be carried on by the company, or a contract entered into more than 2 years before the date of issue of the prospectus.

The prospectus must state the names and addresses of the company’s auditors (if any).

The prospectus must give full particulars of— With the particulars under sub-paragraph (1)(b) must be provided a statement of all sums paid or agreed to be paid to the director or the firm in cash or shares or otherwise by any person either to induce him to become, or to qualify him as, a director, or otherwise for services rendered by him or the firm in connection with the promotion or formation of the company. This paragraph does not apply in the case of a prospectus issued more than 2 years after the date at which the company is entitled to commence business.

If the prospectus invites the public to subscribe for shares in the company and the company’s share capital is divided into different classes of shares, the prospectus must state the right of voting at meetings of the company conferred by, and the rights in respect of capital and dividends attached to, the several classes of shares respectively.

In the case of a company which has been carrying on business, or of a business which has been carried on for less than 3 years, the prospectus must state the length of time during which the business of the company (or the business to be aquired, as the case may be) has been carried on.

The prospectus shall set out a report by the company’s auditors with respect to— If no accounts have been made up in respect of any part of the 5 years ending on a date 3 months before the issue of the prospectus, the report shall contain a statement of that fact. If the company has no subsidiary undertakings, the report shall— If the company has subsidiary undertakings, the report shall—

If the proceeds of the issue of the shares or debentures are to be applied directly or indirectly in the purchase of any business, or any part of the proceeds of the issue is to be so applied, there shall be set out in the prospectus a report made by accountants upon—

The following provisions apply if— There shall be set out in the prospectus a report made by accountants upon— The report shall— In this paragraph “undertaking” and “shares”, in relation to an undertaking, have the same meaning as in Part VII.

If in the case of a company which has been carrying on business, or of a business which has been carried on for less than 5 years, the accounts of the company or business have only been made up in respect of 4 years, 3 years, 2 years or one year, the preceding paragraphs of this Part have effect as if references to 4 years, 3 years, 2 years or one year (as the case may be) were substituted for references to 5 years.

The expression “financial year” in this Part means the year in respect of which the accounts of the company or of the business (as the case may be) are made up; and where by reason of any alteration of the date on which the financial year of the company or business terminates the accounts have been made up for a period greater or less than one year, that greater or less period is for purposes of this Part deemed to be a financial year.

Any report required by this Part shall either indicate by way of note any adjustments as respects the figures of any profits or losses or assets and liabilities dealt with by the report which appear to the persons making the report necessary, or shall make those adjustments and indicate that adjustments have been made.

A report required by paragraph 17 or 18 shall be made by accountants qualified under this Act for appointment as auditors of a company. Such a report shall not be made by an accountant who is an officer or servant, or a partner of or in the employment of an officer or servant, of— The accountants making any report required for purposes of paragraph 17 or 18 shall be named in the prospectus.

Any information required in the case of any company by the following provisions of this Part of this Schedule shall (if not given in the company’s accounts) be given by way of a note to those accounts. Disclosure of accounting policies

The accounting policies adopted by the company in determining the amounts to be included in respect of items shown in the balance sheet and in determining the profit or loss of the company shall be stated (including such policies with respect to the depreciation and diminution in value of assets).

There must be stated–

Paragraphs 38 to 51 require information which either supplements the information given with respect to any particular items shown in the balance sheet or is otherwise relevant to assessing the company’s state of affairs in the light of the information so given. Share capital and debentures

Paragraphs 53 to 57 require information which either supplements the information given with respect to any particular items shown in the profit and loss account or otherwise provides particulars of income or expenditure of the company or of circumstances affecting the items shown in the profit and loss account. Separate statement of certain items of income and expenditure

It shall be stated whether the accounts have been prepared in accordance with applicable accounting standards and particulars of any material departure from those standards and the reasons for it shall be given. Information supplementing the balance sheet

Where sums originally denominated in foreign currencies have been brought into account under any items shown in the balance sheet or profit and loss account, the basis on which those sums have been translated into sterling shall be stated. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

This paragraph applies where financial instruments have been valued in accordance with paragraph 34A or 34C. There must be stated– Where any amount is transferred to or from the fair value reserve during the financial year, there must be stated in tabular form–

Where the company has derivatives that it has not included at fair value, there must be stated for each class of such derivatives–

Sub-paragraph (2) applies if– There must be stated–

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 34D. 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. 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– In sub-paragraph (3) above, references in relation to any item to the comparable amounts determined in accordance with that sub-paragraph are references to–

Where the directors of a company take advantage of the exemption conferred by section 249AA, and the company has during the financial year in question acted as an agent for any person, the fact that it has so acted must be stated.

Subject to paragraphs 63 and 66, the consolidated balance sheet and profit and loss account shall combine the information contained in the separate balance sheets and profit and loss accounts of the holding company and of the subsidiaries dealt with by the consolidated accounts, but with such adjustments (if any) as the directors of the holding company think necessary.

Subject to paragraphs 63 to 66, and to Part V of this Schedule, the consolidated accounts shall, in giving the information required by paragraph 61, comply so far as practicable with the requirements of this Schedule and with the other requirements of this Act as if they were the accounts of an actual company.

The following provisions of this Act, namely— do not, by virtue of paragraphs 61 and 62, apply for the purposes of the consolidated accounts.

Paragraph 62 is without prejudice to any requirement of this Act which applies (otherwise than by virtue of paragraph 61 or 62) to group accounts.

Notwithstanding paragraph 62, the consolidated accounts prepared by a holding company may deal with an investment of any member of the group in the shares of any other body corporate by way of the equity method of accounting in any case where it appears to the directors of the holding company that that body corporate is so closely associated with any member of the group as to justify the use of that method in dealing with investments by that or any other member of the group in the shares of that body corporate. In this paragraph, references to the group, in relation to consolidated accounts prepared by a holding company, are references to the holding company and the subsidiaries dealt with by the accounts.

Notwithstanding paragraphs 61 and 62, paragraphs 17 to 19 and 21 do not apply to any amount shown in the consolidated balance sheet in respect of goodwill arising on consolidation.

In relation to any subsidiaries of the holding company not dealt with by the consolidated accounts paragraphs 59 and 60 apply for the purpose of those accounts as if those accounts were the accounts of an actual company of which they were subsidiaries.

Group accounts which are not prepared as consolidated accounts, together with any notes to those accounts, shall give the same or equivalent information as that required to be given by consolidated accounts by virtue of paragraphs 61 to 67.

This paragraph applies where the company is a holding company and either— and references below in this paragraph to the company's subsidiaries shall be read in a case within paragraph (b) as references to such of the company's subsidiaries as are excluded from the group accounts. Subject to the following provisions of this paragraph— shall be given in a note to the company's accounts. Subject to the following provisions of this paragraph, the aggregate amount of the total investment of the holding company in the shares of the subsidiaries shall be stated in a note to the company's accounts by way of the equity method of valuation. Sub-paragraph (3) does not apply where the company is a wholly-owned subsidiary of another body corporate incorporated in Great Britain if there is included in a note to the company's accounts a statement that in the opinion of the directors of the company the aggregate value of the assets of the company consisting of shares in, or amounts owing (whether on account of a loan or otherwise) from, the company's subsidiaries is not less than the aggregate of the amounts at which those assets are stated or included in the company's balance sheet. In so far as information required by any of the preceding provisions of this paragraph to be stated in a note to the company's accounts is not obtainable, a statement to that effect shall be given instead in a note to those accounts. The Secretary of State may, on the application or with the consent of the company's directors, direct that in relation to any subsidiary sub-paragraphs (2) and (3) shall not apply, or shall apply only to such extent as may be provided by the direction. Where in any case within sub-paragraph (1)(b) the group accounts are consolidated accounts, references above in this paragraph to the company's accounts and the company's balance sheet respectively shall be read as references to the consolidated accounts and the consolidated balance sheet.

Where a company has subsidiaries whose financial years did not end with that of the company, the following information shall be given in relation to each such subsidiary (whether or not dealt with in any group accounts prepared by the company) by way of a note to the company's accounts or (where group accounts are prepared) to the group accounts, that is to say—

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–

The expressions listed in sub-paragraph (2) have the same meaning as they have in Council Directive 78/660/EEC on the annual accounts of certain types of companies, as amended. 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”.

The following information shall be given where an undertaking included in the consolidation has an interest in an associated undertaking. The name of the associated undertaking shall be stated. There shall be stated— The following information shall be given with respect to the shares of the undertaking held— and the information under paragraphs (a) and (b) shall be shown separately. There shall be stated— In this paragraph “associated undertaking” has the meaning given by paragraph 20 of Schedule 4A; and the information required by this paragraph shall be given notwithstanding that paragraph 22(3) of that Schedule (materiality) applies in relation to the accounts themselves.

The information required by paragraphs 24 and 25 shall be given where at the end of the financial year the parent company has a significant holding in an undertaking which is not one of its subsidiary undertakings and does not fall within paragraph 21 (joint ventures) or paragraph 22 (associated undertakings). A holding is significant for this purpose if—

The name of the undertaking shall be stated. There shall be stated— The following information shall be given with respect to the shares of the undertaking held by the parent company. There shall be stated—

. . . there shall also be stated— That information need not be given in respect of an undertaking if— Information otherwise required by this paragraph need not be given if it is not material. For the purposes of this paragraph the “relevant financial year” of an undertaking is—

The information required by paragraphs 27 and 28 shall be given where at the end of the financial year the group has a significant holding in an undertaking which is not a subsidiary undertaking of the parent company and does not fall within paragraph 21 (joint ventures) or paragraph 22 (associated undertakings). A holding is significant for this purpose if—

The name of the undertaking shall be stated. There shall be stated— The following information shall be given with respect to the shares of the undertaking held by the group. There shall be stated—

. . .there shall also be stated— That information need not be given if— Information otherwise required by this paragraph need not be given if it is not material. For the purposes of this paragraph the “relevant financial year” of an outside undertaking is—

Where the parent company is itself a subsidiary undertaking, the following information shall be given with respect to that parent undertaking of the company which heads— The name of the parent undertaking shall be stated. There shall be stated— If copies of the group accounts referred to in sub-paragraph (1) are available to the public, there shall also be stated the addresses from which copies of the accounts can be obtained.

Where the parent company is itself a subsidiary undertaking, the following information shall be given with respect to the company (if any) regarded by the directors as being that company’s ultimate parent company. The name of that company shall be stated. If known to the directors, there shall be stated— In this paragraph “company” includes any body corporate.

References in this Part of this Schedule to shares held by the parent company or the group shall be construed as follows. For the purposes of paragraphs 16, 22(4) and (5) and 23 to 25 (information about holdings in subsidiary and other undertakings)— References to shares held by the group are to any shares held by or on behalf of the parent company or any of its subsidiary undertakings; but there shall be treated as not held by the group any shares held on behalf of a person other than the parent company or any of its subsidiary undertakings. Shares held by way of security shall be treated as held by the person providing the security—

The following applies for the interpretation of paragraphs 22 to 32. A reference to the company's subsidiary— The following definitions apply—

This Part of this Schedule requires information to be given only so far as it is contained in the company's books and papers or the company has the right to obtain it from the persons concerned.

There shall be shown the aggregate amount of any consideration paid to or receivable by third parties for making available the services of any person— The reference to consideration includes benefits otherwise than in cash; and in relation to such consideration the reference to its amount is to the estimated money value of the benefit. The nature of any such consideration shall be disclosed. The reference to third parties is to persons other than—

The following applies with respect to the amounts to be shown under this Part of this Schedule. The amount in each case includes all relevant sums paid by or receivable from— except sums to be accounted for to the company or any of its subsidiary undertakings or, by virtue of sections 314 and 315 of this Act (duty of directors to make disclosure on company takeover; consequence of non-compliance), to past or present members of the company or any of its subsidiaries or any class of those members. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References to amounts paid to or receivable by a person include amounts paid to or receivable by a person connected with him or a body corporate controlled by him (but not so as to require an amount to be counted twice).

The amounts to be shown for any financial year under this Part of this Schedule are the sums receivable in respect of that year (whenever paid) or, in the case of sums not receivable in respect of a period, the sums paid during that year. But where— those sums shall, to the extent to which the liability is released or not enforced or they are charged as mentioned above (as the case may be), be shown in a note to the first accounts in which it is practicable to show them and shall be distinguished from the amounts to be shown apart from this provision.

Where it is necessary to do so for the purpose of making any distinction required by the preceding paragraphs in an amount to be shown in compliance with this Part of this Schedule, the directors may apportion any payments between the matters in respect of which these have been paid or are receivable in such manner as they think appropriate.

The following applies for the interpretation of this Part of this Schedule. A reference to a subsidiary undertaking of the company— The following definitions apply— References in this Part of this Schedule to a person being “connected” with a director, and to a director “controlling” a body corporate, shall be construed in accordance with section 346.

This Part of this Schedule requires information to be given only so far as it is contained in the company’s books and papers or the company has the right to obtain it from the persons concerned.

Paragraphs 15 and 16 do not apply in relation to the following transactions, arrangements and agreements—

This Part of this Schedule applies in relation to the following classes of transactions, arrangements and agreements—

To comply with this Part of this Schedule, the accounts must contain a statement, in relation to transactions, arrangements and agreements made by the company or a subsidiary of it for persons who at any time during the financial year were officers of a company (but not directors or shadow directors), of— This paragraph does not apply to transactions, arrangements and agreements made by the company or any of its subsidiaries for an officer of the company if the aggregate amount outstanding at the end of the financial year under the transactions, arrangements and agreements so made for that officer does not exceed £2,500. Section 258 of the Companies Act 2006 (power of Secretary of State to alter money sums by statutory instrument subject to negative resolution in Parliament) applies as if the money sum specified above in this paragraph were specified in Part 10 of that Act.

The following provisions of the Companies Act 2006 apply for the purposes of this Part of this Schedule— and “amount outstanding” means the amount of the outstanding liabilities of the person for whom the transaction, arrangement or agreement was made or, in the case of a guarantee or security, the amount guaranteed or secured.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . If, in the case of such of the fixed assets of the company . . . as consist in interests in land, their market value (as at the end of the financial year) differs substantially from the amount at which they are included in the balance sheet, and the difference is, in the directors’ opinion, of such significance as to require that the attention of members of the company or of holders of its debentures should be drawn to it, the report shall indicate the difference with such degree of precision as is practicable. In relation to a group directors' report sub-paragraph (2) has effect as if the reference to the fixed assets of the company was a reference to the fixed assets of the company and of its subsidiary undertakings included in the consolidation.

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If— the directors’ report for the year shall contain the particulars specified in sub-paragraph (2). Those particulars are— If— the directors’ report for the year is not, by virtue of sub-paragraph (1), required to contain the particulars specified in sub-paragraph (2); but, if the total amount of any such donations or expenditure (or both) made or incurred in that year by the company and the subsidiaries between them exceeds £200, the directors’ report for the year shall contain those particulars in relation to each body by whom any such donation or expenditure has been made or incurred. Any expression used in this paragraph which is also used in Part XA of this Act has the same meaning as in that Part.

If the company (not being the wholly-owned subsidiary of a company incorporated in Great Britain) has in the financial year made any contribution to a non-EU political party, the directors’ report for the year shall contain— If— the directors’ report for the year is not, by virtue of sub-paragraph (1), required to contain any such statement as is there mentioned, but it shall instead contain a statement of the total amount of the contributions made in the year by the company and the subsidiaries between them. In this paragraph “contribution”, in relation to an organisation, means— In this paragraph “non-EU political party” means any political party which carries on, or proposes to carry on, its activities wholly outside the member States.

If— the directors’ report for the year shall contain, in the case of each of the purposes for which money has been given, a statement of the amount of money given for that purpose. If— sub-paragraph (1) does not apply to the company; but, if the amount given in that year for charitable purposes by the company and the subsidiaries between them exceeds £200, the directors’ report for the year shall contain, in the case of each of the purposes for which money has been given by the company and the subsidiaries between them, a statement of the amount of money given for that purpose. Money given for charitable purposes to a person who, when it was given, was ordinarily resident outside the United Kingdom is to be left out of account for the purposes of this paragraph. For the purposes of this paragraph “charitable purposes” means purposes which are exclusively charitable, and as respects Scotland a purpose is charitable if it is listed in section 7(2) of the Charities and Trustee Investment (Scotland) Act 2005 .

The directors’ report shall contain— In relation to a group directors' report paragraphs (a), (b) and (c) of sub-paragraph (1) have effect as if the references to the company were references to the company and its subsidiary undertakings included in the consolidation.

This Part of this Schedule applies to the directors' report for a financial year if the company had securities carrying voting rights admitted to trading on a regulated market at the end of that year. The report shall contain detailed information, by reference to the end of that year, on the following matters— For the purposes of sub-paragraph (2)(a) a company's capital includes any securities in the company that are not admitted to trading on a regulated market. For the purposes of sub-paragraph (2)(c) a person has an indirect holding of securities if— Sub-paragraph (2)(j) does not apply to an agreement if— In this paragraph—

Subject to the following provisions of this Schedule— in either case in the order and under the headings and sub-headings given in the format adopted. Sub-paragraph (1) above is not to be read as requiring the heading or sub-heading for any item to be distinguished by any letter or number assigned to that item in the format adopted.

Where in accordance with paragraph 1 a small company’s balance sheet or profit and loss account for any financial year has been prepared by reference to one of the formats set out in section B below, the directors of the company shall adopt the same format in preparing the accounts for subsequent financial years of the company unless in their opinion there are special reasons for a change. Particulars of any change in the format adopted in preparing a small company’s balance sheet or profit and loss account in accordance with paragraph 1 shall be disclosed, and the reasons for the change shall be explained, in a note to the accounts in which the new format is first adopted.

Any item required in accordance with paragraph 1 to be shown in a small company’s balance sheet or profit and loss account may be shown in greater detail than required by the format adopted. A small company’s balance sheet or profit and loss account may include an item representing or covering the amount of any asset or liability, 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 any small company’s balance sheet— In preparing a small company’s balance sheet or profit and loss account the directors of the company shall adapt the arrangement and headings and sub-headings otherwise required by paragraph 1 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. Items to which Arabic numbers are assigned in any of the formats set out in section B below may be combined in a small company’s accounts for any financial year if either— but in a case within paragraph (b) the individual amounts of any items so combined shall be disclosed in a note to the accounts. Subject to paragraph 4(3) below, a heading or sub-heading corresponding to an item listed in the format adopted in preparing a small company’s balance sheet or profit and loss account shall not be included if there is no amount to be shown for that item in respect of the financial year to which the balance sheet or profit and loss account relates. Every profit and loss account of a small company shall show the amount of the company’s profit or loss on ordinary activities before taxation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

In respect of every item shown in a small company’s balance sheet or profit and loss account the corresponding amount for the financial year immediately preceding that to which the balance sheet or profit and loss account relates shall also be shown. Where that corresponding amount is not comparable with the amount to be shown for the item in question in respect of the financial year to which the balance sheet or profit and loss account relates, the former amount may be adjusted and particulars of the non-comparability and of any adjustment shall be disclosed in a note to the accounts. Paragraph 3(5) does 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 paragraph 1 for that item.

Amounts in respect of items representing assets or income may not be set off against amounts in respect of items representing liabilities or expenditure (as the case may be), or vice versa.

References in this Part of this Schedule to the items listed in any of the formats set out below are to those items read together with any of the notes following the formats which apply to any of those items, and the requirement imposed by paragraph 1 to show the items listed in any such format in the order adopted in the format is subject to any provision in those notes for alternative positions for any particular items.

A number in brackets following any item in any of the formats set out below is a reference to the note of that number in the notes following the formats.

In the notes following the formats—

Subject to paragraph 15 below, the amounts to be included in respect of all items shown in a small company’s accounts shall be determined in accordance with the principles set out in paragraphs 10 to 14.

The company shall be presumed to be carrying on business as a going concern.

Accounting policies shall be applied consistently within the same accounts and from one financial year to the next.

The amount of any item shall be determined on a prudent basis, and in particular—

All income and charges relating to the financial year to which the accounts relate shall be taken into account, without regard to the date of receipt or payment.

In determining the aggregate amount of any item the amount of each individual asset or liability that falls to be taken into account shall be determined separately.

If it appears to the directors of a small company that there are special reasons for departing from any of the principles stated above in preparing the company’s accounts in respect of any financial year they may do so, but particulars of the departure, the reasons for it and its effect shall be given in a note to the accounts.

Subject to sections C and D of this Part of this Schedule, the amounts to be included in respect of all items shown in a small company’s accounts shall be determined in accordance with the rules set out in paragraphs 17 to 28.

Subject to any provision for depreciation or diminution in value made in accordance with paragraph 18 or 19 the amount to be included in respect of any fixed asset shall be its purchase price or production cost.

In the case of any fixed asset which has a limited useful economic life, the amount of— shall be reduced by provisions for depreciation calculated to write off that amount systematically over the period of the asset’s useful economic life.

Where a fixed asset investment of a description falling to be included under item B.III of either of the balance sheet formats set out in Part I of this Schedule has diminished in value provisions for diminution in value may be made in respect of it and the amount to be included in respect of it may be reduced accordingly; and any such provisions which are not shown in the profit and loss account shall be disclosed (either separately or in aggregate) in a note to the accounts. Provisions 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 provisions which are not shown in the profit and loss account shall be disclosed (either separately or in aggregate) in a note to the accounts. Where the reasons for which any provision was made in accordance with sub-paragraph (1) or (2) have ceased to apply to any extent, that provision shall be written back to the extent that it is no longer necessary; and any amounts written back in accordance with this sub -paragraph which are not shown in the profit and loss account shall be disclosed (either separately or in aggregate) in a note to the accounts.

The following paragraphs apply for the purposes of this Schedule and its interpretation.

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–

The expressions listed in sub-paragraph (2) have the same meaning as they have in Council Directive 78/660/EEC on the annual accounts of certain types of companies, as amended. 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”