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The Building Societies (Accounts and Related Provisions) Regulations 1998

Type Statutory-Instrument

Publication 1998-03-03

Last updated 2022-06-06

State In force

Department King's Printer of Acts of Parliament

Source legislation.gov.uk

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Made: 3rd March 1998

Laid before Parliament: 5th March 1998

Coming into force: 27th March 1998

The Building Societies Commission, with the consent of the Treasury, in exercise of the powers conferred on it by sections 73(6), (7) and (8), 74(1), (2), (3), (4) and (6), 75(1) and 76(3) of the Building Societies Act 1986[^f00001], and of all other powers enabling it in that behalf, hereby makes the following Regulations:

Citation and commencement

1

These Regulations may be cited as the Building Societies (Accounts and Related Provisions) Regulations 1998 and shall come into force on 27th March 1998.

Interpretation

2

In these Regulations—

“the Act” means the Building Societies Act 1986;

“group” means a society and its subsidiary undertakings;

“group accounts society” means a society the directors of which are obliged by section 72E of the Act (duty to prepare group accounts) to prepare group accounts;

“particular account” means an income and expenditure account or a balance sheet;

“subsidiary undertaking” means a subsidiary undertaking of a group accounts society with which the group accounts of the society are required by section 72E of the Act to deal;

“single accounts society” means a society which is not a group accounts society;

“society” means a building society; and

“undertaking” has the meaning given to that word in section 1161(1) of the Companies Act 2006.

Annual accounts

3

(1) In respect of the annual accounts of any single accounts society—

(a) every income and expenditure account shall be prepared in the format set out in Part I of Schedule 1; and

(b) every balance sheet shall be prepared in the format set out in Part I of Schedule 2; ...

in each case in accordance with the relevant provisions, and every such document shall, subject to the following paragraphs of this regulation, be prepared in the order and under the headings and subheadings in the format applicable to it.

(2) In respect of the annual accounts of any group accounts society—

(a) the provisions of this regulation shall apply subject to the provisions of regulation 4, the supplementary provisions of which shall also have effect in relation to those accounts; and

(b) within those accounts—

(i) every income and expenditure account relating to the society shall be prepared in the format set out in Part I of Schedule 1;

(ii) every income and expenditure account relating to the society and its subsidiary undertakings shall be prepared on a consolidated basis in the format set out in Part II of Schedule 1;

(iii) every balance sheet relating to the society shall be prepared in the format set out in Part I of Schedule 2; and

(iv) every balance sheet relating to the society and its subsidiary undertakings shall be prepared on a consolidated basis in the format set out in Part II of Schedule 2; ...

(v) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

and in each case in accordance with the relevant provisions, and every such document shall, subject to the following paragraphs of this regulation, be prepared in the order and under the headings and subheadings in the format applicable to it.

(3) Paragraphs (1) and (2) are not to be read as—

(a) requiring the heading or subheading for any item to be distinguished by any letter or number assigned to that item in the format in which it appears;

(b) prohibiting the showing of any item in a particular account in greater detail (with or without additional subdivisions) than is required by the format for that particular account; or

(c) prohibiting the insertion of additional items, provided that their contents are not specifically covered by any of the items prescribed in the formats.

(4) Where the heading of an item in any format set out in Schedule 1 or 2 contains any wording in square brackets, that wording may be omitted if not applicable to the society.

(5) Items preceded by a lower case letter in any format set out in Schedule 1 or 2 may be combined in a society’s annual accounts for any financial year if either:

(a) their individual amounts are not material to assessing—

(i) in respect of an income and expenditure account, the income and expenditure of the society (or, as the case may be, the society and its subsidiary undertakings) for that year; and

(ii) in respect of a balance sheet, the state of affairs of the society (or, as the case may be, the society and its subsidiary undertakings) as at the end of that year; ...

(iii) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b) their combination facilitates that assessment,

but where sub-paragraph (b) applies, the individual amounts of any items so combined shall be disclosed in a note to the annual accounts.

(6) Subject to paragraph (7), a heading or subheading for an item contained in any format set out in Schedule 1 or 2 shall not be included if there is no amount to be shown for that item in respect of the financial year to which the annual accounts relate (and a total need not be included if, as a result of this paragraph, it would be composed of a single item).

(7) For the purpose of comparing particular accounts with those for the preceding financial year—

(a) in respect of every item shown in a balance sheet and income and expenditure account, the corresponding amount for the preceding financial year shall be shown;

(b) 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 annual accounts relate, the former amount shall be adjusted and particulars of the adjustment and the reasons for it shall be disclosed in a note to the annual accounts; and

(c) paragraph (6) does not apply in any case where an amount can be shown for the item to which the heading or subheading relates in respect of the preceding financial year; in such a case that amount shall be shown under the heading or subheading required for that item.

(8) In this regulation, “the relevant provisions” means, in relation to any particular account, Part III of the Schedule in question, Parts I and II of which contain formats of that particular account.

Group accounts: supplementary provisions

4

(1) The annual accounts of a group accounts society shall comply with the further provisions of Schedule 4 as to the form and content of the consolidated income and expenditure account, the balance sheet... and the additional information to be provided by way of notes to the accounts.

(2) Subject to the exceptions authorised or required by this regulation, all the subsidiary undertakings of the society shall be included in the consolidated income and expenditure account and the balance sheet, as required by regulation 3(2), and in the notes to the accounts in respect of the society and its subsidiary undertakings in combination, as required by regulation 5(2)(b).

(3) A subsidiary undertaking may be excluded from the requirements of paragraph (2) if compliance with those requirements is not material for the purpose of giving a true and fair view for the society and its subsidiary undertakings as a whole, of the matters set out in subsection (2) of section 72F of the Act.

(4) If a society has two or more subsidiary undertakings, they do not qualify under paragraph (3) for exclusion from the requirements of paragraph (2) if taken as a whole they are material for the purpose described in paragraph (3).

(5) A subsidiary undertaking may also be excluded from the requirements of paragraph (2) where—

(a) severe long-term restrictions substantially hinder the exercise by the society of its rights over the assets or management of the subsidiary undertaking;

(b) the information necessary for the preparation of group accounts cannot be obtained without disproportionate expense or undue delay; or

(c) the interest of the society is held exclusively with a view to subsequent resale and the subsidiary undertaking has not been previously included in the group accounts prepared by the society.

(6) The references in sub-paragraphs (a) and (c) of paragraph (5) to the rights of the society and to the interest of the society are, respectively to rights and interests held by or attributed to the society for the purposes of section 1162 of the Companies Act 2006 (parent and subsidiary undertakings) in the absence of which it would not be the parent body.

(7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(7A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(8) Each particular account which is a group account shall combine the information contained in the particular account of the society and the accounts of its subsidiary undertakings from which it is derived, adjusted so far as is necessary to consolidate those accounts.

(9) In the group accounts, the interest of the society or of any subsidiary undertaking in an associated undertaking, and the amount of income or expenditure attributable to such an interest, shall be shown by the equity method of accounting (which shall include dealing with any goodwill arising in accordance with paragraphs 8 to 10 and 12 of Schedule 7).

(10) Where an associated undertaking is itself a parent undertaking, the net assets and income or expenditure required to be taken into account by paragraph (9) are those of the parent undertaking and its subsidiary undertakings, after making any consolidation adjustments.

(11) For the purposes of paragraph (10), “parent undertaking” and “subsidiary undertaking”have the meanings attributed to those phrases by section 1162 of the Companies Act 2006.

(12) The equity method of accounting referred to in paragraph (9) need not be applied if the amounts in question are not material for the purpose of giving a true and fair view, for the society and its subsidiary undertakings as a whole, of the matters set out in subsection (2) of section 72F of the Act.

Notes to annual accounts

5

(1) The annual accounts of any single accounts society shall, subject to paragraph (5), include notes to them containing the material specified and set out in the manner specified in Schedule 5, in addition to the notes required to be included by the Act and by other provisions of these Regulations.

(2) The annual accounts of any group accounts society shall, subject to paragraph (5) and any provision in Schedule 5 which indicates otherwise, include notes to them containing—

(a) in respect of the society; and

(b) in respect of the society and those of its subsidiary undertakings not excluded from the requirements of regulation 4(2), in combination,

the material specified in Schedule 5 in addition to the notes required to be included by other provisions of these Regulations.

(3) For the purposes of paragraph (2)(b) any reference in a ... provision of Schedule 5 to a society shall be taken as a reference to the society and its subsidiary undertakings in combination.

(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5) Paragraphs (1) and (2) are not to be read as prohibiting the disclosing of any material in the notes to the annual accounts in greater detail than is required by these Regulations.

Holdings in undertakings

6

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Accounting principles and rules

7

Each society shall prepare its annual accounts in accordance with the accounting principles and rules set out in Schedule 7.

Directors' report

8

Each directors' report of a society prepared under section 75 of the Act shall contain, in addition to the other matters required to be contained in it by the Act, the material specified in Schedule 8.

Annual business statement

9

(1) Each annual business statement of a society prepared under section 74 of the Act shall, subject to paragraphs (2) and (3), contain the material specified in Schedule 9.

(2) Nothing in this regulation—

(a) requires the setting out of the material specified in Schedule 9 in any particular manner; or

(b) prohibits the inclusion, for the purpose of the giving in the annual business statement of a true representation of the matters to which that material relates, of material additional to that required to be included by this regulation.

(3) Any material required or permitted by this regulation to be contained in the annual business statement may be included instead in the notes to the annual accounts or in the directors' report and, where any such material is so included, the annual business statement shall specify where in those notes or that report that material is to be found.

(4) The material required to be contained in the annual business statement by virtue of paragraph 3 of Schedule 9 shall not be the subject of report by auditors under section 78 of the Act.

Summary financial statement

10

(1) Subject to paragraph (2), each summary financial statement of a society prepared under section 76 of the Act shall be prepared in the order and under the headings and subheadings shown in the formats (and as directed by the notes) set out in the relevant Part, and in accordance with the provisions of Part II, of Schedule 10, so as to contain—

(a) a statement in the prescribed form for the purposes of section 76(4) of the Act;

(b) a summary directors' report;

(d) a summary of key financial ratios,

followed by the statement of the auditors' opinion required to be included by section 76(5) of the Act, and so as to give a summary account of the relevant matters.

(1A) For the purposes of paragraph (1) “the relevant Part”, for a society whose annual accounts are Building Societies Act accounts, is Part I, and for a society whose annual accounts are IAS accounts, is Part IA.

(2) Paragraphs (1) and (1A) are not to be read as—

(a) requiring the heading or subheading for any item to be distinguished by any letter or number assigned to that item in the format in which it appears;

(b) prohibiting the inclusion, in place of the words “THIS YEAR” and “LAST YEAR” in Sections C and D of Parts I and IA of Schedule 10, of other column headings consistent with paragraph 2 of Part II of that Schedule; or

(c) prohibiting the inclusion, for the purpose of assisting the giving in the summary financial statement of a summary account of the relevant matters, of material additional to that required to be included by this regulation.

(3) In this regulation “the relevant matters” are, in relation to a financial year of a society with which a summary financial statement deals, the financial development (during the year) and the financial position (at the end of the year) of—

(a) where section 76(2) of the Act does not apply, the society; and

(b) where section 76(2) of the Act applies, the society and its connected undertakings.

Interpretation of Schedules

11

Schedule 11 shall have effect for the interpretation of the Schedules to these Regulations.

Transitional provisions

12

(1) Where any provision of these Regulations requires—

(a) the recording of a particular item for the entirety of a financial year, and—

(i) that financial year began before the operative date of these Regulations for a society; and

(ii) the legislation in force, or, as the case may be, the requirements applying to a society by virtue of paragraph (4) during the period beginning with the start of the financial year and ending immediately before the operative date of these Regulations for a society did not require the recording of that particular item; or

(b) the recording of a particular item as at the end of a previous financial year, and—

(i) that previous financial year ended before the operative date of these Regulations for a society; and

(ii) the legislation in force or, as the case may be, the requirements applying to a society by virtue of paragraph (4) as at the end of that previous financial year did not require the recording of that partic,.

then if the records of the society are so kept as to enable that particular item to be identified, it shall be identified and so recorded, but if the records of the society are not so kept, it shall be included on the basis of an estimate.

(2) Where under paragraph (1) an estimate is used in respect of any item, that fact shall be disclosed in a note to the accounts.

(3) In the case of acquisitions made prior to the date on which a society first prepared its annual accounts in accordance with the Building Societies (Accounts and Related Provisions) Regulations 1992[^f00006], no amount need be included in any figure required to be disclosed under paragraph 11 of Schedule 4, or (if all relevant acquisitions were made prior to that date) no figure need be disclosed, if the information necessary to calculate the amount or figure with material accuracy is unavailable or cannot be obtained without unreasonable expense and delay, provided it is disclosed in the notes to the accounts that an amount has not been included or the figure has not been disclosed on these grounds.

(4) A society shall prepare, with respect to a financial year which ended before the operative date of these Regulations for it, such annual accounts in respect of that financial year as it would have been required to prepare had these Regulations not been made subject only to the omission of the statement of the source and application of funds from the annual accounts for a financial year which ends after 22nd March 1999, and for the purpose of this paragraph the annual accounts shall be taken to include the annual business statement, the directors' report and the summary financial statement.

(5) A society may prepare, with respect to the first financial year ending after the operative date of these Regulations for it, a directors' report which does not contain the information described in paragraph 9(2) of Schedule 8.

(6) For the purpose of this regulation, the operative date of these Regulations for a society is the later of—

(a) the date of the coming into force of these Regulations; and

(b) the date on which the provisions of the Building Societies Act 1997 specified in Part II of the Schedule to the Building Societies Act 1997 (Commencement No. 3) Order 1997[^f00007] have come into force in accordance with Article 2 of the Order in relation to the society.

Revocation

13

The Building Societies (Accounts and Related Provisions) Regulations 1992, the Building Societies (Accounts and Related Provisions) (Amendment) Regulations 1994[^f00008] and the Building Societies (Accounts and Related Provisions) (Amendment) Regulations 1995[^f00009] are hereby revoked.

SCHEDULE 1

PART I — FORMAT OF SOCIETY INCOME AND EXPENDITURE ACCOUNT

1

Interest receivable and similar income

(i) On loans fully secured on residential property

(ii) On other loans

(b) On debt securities

(d) Other interest receivable and similar income

2

Interest payable and similar charges

(i) On shares held by individuals

(ii) On other shares

(iii) On subscribed capital

(b) On deposits and other borrowings

3

Net interest receivable

4

Income from investments

(a) Income from equity shares [and other variable yield securities]

(b) Income from participating interests

(d) Other income from investments

5

Fees and commissions receivable

6

Fees and commissions payable

7

Net profit or loss on financial operations

8

Other operating income

9

Administrative expenses

(a) Staff costs

(i) Wages and salaries

(ii) Social security costs

(iii) Other pension costs

(b) Other administrative expenses

10

Depreciation and amortisation

11

Other operating charges

12

Provisions

(a) Provisions for bad and doubtful debts

(b) Provisions for contingent liabilities and commitments

13

Adjustments to provisions

(a) Adjustments to provisions for bad and doubtful debts

(b) Adjustments to provisions for contingent liabilities and commitments

14

Amounts written off fixed asset investments

15

Adjustments to amounts written off fixed asset investments

16

Profit or loss on ordinary activities before tax

17

Tax on profit or loss on ordinary activities

18

Profit or loss on ordinary activities after tax

19

Extraordinary income

20

Extraordinary charges

21

Extraordinary profit or loss

22

Tax on extraordinary profit or loss

23

Extraordinary profit or loss after tax

24

Other taxes not shown under the preceding items

25

Profit or loss for the financial year

PART II — FORMAT OF CONSOLIDATED INCOME AND EXPENDITURE ACCOUNT

1

Interest receivable and similar income

(i) On loans fully secured on residential property

(ii) On other loans

(b) On debt securities

(d) Other interest receivable and similar income

2

Interest payable and similar charges

(i) On shares held by individuals

(ii) On other shares

(iii) On subscribed capital

(b) On deposits and other borrowings

3

Net interest receivable

4

Income from investments

(a) Income from equity shares [and other variable yield securities]

(b) Income from associated undertakings

(d) Income from shares in unconsolidated subsidiary undertakings

(e) Other income from investments

5

Fees and commissions receivable

6

Fees and commissions payable

7

Net profit or loss on financial operations

8

Other operating income

9

Administrative expenses

(a) Staff costs

(i) Wages and salaries

(ii) Social security costs

(iii) Other pension costs

(b) Other administrative expenses

10

Depreciation and amortisation

11

Other operating charges

12

Provisions

(a) Provisions for bad and doubtful debts

(b) Provisions for contingent liabilities and commitments

13

Adjustments to provisions

(a) Adjustments to provisions for bad and doubtful debts

(b) Adjustments to provisions for contingent liabilities and commitments

14

Amounts written off fixed asset investments

15

Adjustments to amounts written off fixed asset investments

16

Profit or loss on ordinary activities before tax

17

Tax on profit or loss on ordinary activities

18

Profit or loss on ordinary activities after tax

19

Minority interests

20

Profit or loss before extraordinary items

21

Extraordinary income

22

Extraordinary charges

23

Extraordinary profit or loss

24

Tax on extraordinary profit or loss

25

Extraordinary profit or loss after tax

26

Minority interests in extraordinary profit or loss after tax

27

Other taxes not shown under the preceding items

28

Profit or loss for the financial year

PART III — PROVISIONS APPLICABLE TO PARTS I AND II

1

(1) Item 1(a) in each of Parts I and II shall include—

(a) all income from assets entered under Asset item B in the balance sheet in the corresponding Part of Schedule 2, however calculated; and

(b) interest receivable on—

(i) in the case of Part I, loans within Asset items C. 2 and C. 3; and

(ii) in the case of Part II, loans within Asset items C. 2 to C. 4.

(2) Item 1(b) and (c) in each of Parts I and II shall include interest, other income and profits net of losses arising from liquid assets, except to the extent that they are included in item 7 in Parts I and II in accordance with paragraph 4 of this Part and the notes to the annual accounts shall disclose the amount of profits net of losses arising from liquid assets (except for amounts included in item 7 in each of Parts I and II) and the amount of interest and other income arising from them as separate amounts unless those two amounts are separately stated under each of item 1(b) and (c) in each case.

(3) Item 1 in each Part shall include fees and commissions receivable similar in nature to interest and calculated on a time basis or by reference to the amount of the claim or liability (but not other fees and commissions receivable).

(4) Item 1 in each Part shall also include income from financial instruments, which is spread over the actual duration of the contract and similar in nature to interest.

(5) The total amount of income from fixed income securities included in item 1 in each Part shall be disclosed in a note to the accounts.

2

(1) Items 2(a)(i) and 2(a)(ii) in each of Parts I and II shall include all charges arising, respectively, out of liabilities shown under Liability item A in the corresponding Part of Schedule 2.

(2) Item 2(b) in each Part shall include all charges arising out of liabilities shown under Liability items B, C, D and H in the corresponding Part of Schedule 2.

(3) Item 2 in each Part shall include fees and commissions payable similar in nature to interest and calculated on a time basis or by reference to the amount of the claim or liability (but not other fees and commissions payable).

(4) Item 2 in each Part shall also include charges on financial instruments which are spread over the actual duration of the contract and similar in nature to interest.

3

(1) Item 5 in each of Parts I and II shall include income in respect of all services supplied for the account of third parties, apart from fees and commissions required to be included under “interest receivable” in item 1 in each Part, and item 6 shall include charges for the use of services of third parties, apart from fees and commissions required to be included under “interest payable”in item 2 in each Part.

(2) Any amount, apart from an appointed agency payment, which represents—

(a) fees and commissions for guarantees and loan administration;

(b) commissions and other charges and income in respect of payment transactions, account administration charges and commissions for the safe custody and administration of deeds, securities or other related documents;

(d) commissions and other charges and income in connection with insurance and pension contracts; or

(e) commissions and other charges and income for brokerage services in connection with savings and insurance contracts and loans,

and which falls within sub-paragraph (1) but would also be capable of being included within an item other than those referred to in that sub-paragraph shall be included within items 5 and 6 in Parts I and II as appropriate.

(3) Appointed agency payments shall be included within item 9(b) in each Part.

(4) For the purposes of sub-paragraphs (2) and (3), an appointed agency payment is a payment for a relevant agency function to a person who, by virtue of an appointment by a society, acts as its agent in that function, and a relevant agency function comprises action as an agent of the society for the purpose of receipt of sums in respect of shares or deposits or the making of loans or advances.

4

Item 7 in each of Parts I and II shall comprise—

(a) the net profit or net loss on transactions in securities which are not held as financial fixed assets together with amounts written off or written back as a result of the application of paragraph 16(1) in Schedule 7; and

(b) the net profit or loss on financial instruments, except in so far as that income or charge is included, in accordance with paragraphs 1(4) and 2(4), under items 1 and 2 in each of Parts I and II.

5

Item 10 in each of Parts I and II shall comprise—

(a) amortisation and other amounts written off Asset item D; and

(b) depreciation and other amounts written off Asset item E,

in the corresponding Part of Schedule 2.

6

Item 12(a) in each of Parts I and II shall comprise charges for amounts written off and for provisions made in respect of loans and advances to customers shown under Asset item B in the corresponding Part of Schedule 2.

7

Item 12(b) in each of Parts I and II shall comprise charges for provisions for contingent liabilities and commitments of a type which would, if not provided for, be shown under Memorandum items A and B in the corresponding Part of Schedule 2.

8

Item 13(a) in each of Parts I and II shall include credits from the recovery of loans and advances to customers shown under Asset item B in the corresponding Part of Schedule 2 and which have been previously written off, or were written back following earlier write offs, and from the reduction of provisions previously made with respect to such loans and advances.

9

Item 13(b) in each of Parts I and II shall comprise credits from the reduction of provisions previously made with respect to contingent liabilities and commitments.

10

Item 14 in each of Parts I and II shall comprise amounts written off in respect of transferable securities held as financial fixed assets, participating interests, and shares in subsidiary undertakings which are included in Asset items A.2 to A.4 and C in the corresponding Part of Schedule 2.

11

Item 15 in each of Parts I and II shall include amounts written back following earlier write offs and provisions in respect of transferable securities held as financial fixed assets, participating interests and subsidiary undertakings and which are included in Asset items A.2 to A.4 and C in the corresponding Part of Schedule 2.

12

In this Schedule “financial instrument” means—

(a) in relation to Parts I and II, an instrument concerning a transaction described in subsections (2) to (4) of section 9A of the Act[^f00010] (restrictions on certain transactions); and

(b) in relation to Part II, an instrument on which interest or a dividend is capable of being received and which is not an advance, a loan or a liquid asset.

13

Where a heading in either Part I or Part II contains the wording “profit or loss”, such wording shall be replaced by “profit” or “loss” as appropriate.

SCHEDULE 2

PART I — FORMAT OF SOCIETY BALANCE SHEET

Assets

A

LIQUID ASSETS

1

Cash in hand and balances with the Bank of England

2

Treasury bills and other eligible bills

(a) Treasury bills and similar securities

(b) Other eligible bills

3

Loans and advances to credit institutions

(a) Repayable on demand

(b) Other loans and advances

4

Debt securities [and other fixed income securities]

(a) Issued by public bodies

(b) Issued by other borrowers

5

Other liquid assets

B

LOANS AND ADVANCES TO CUSTOMERS

1

Loans fully secured on residential property

2

Other loans

(a) Loans fully secured on land

(b) Other loans

C

INVESTMENTS

1

Equity shares [and other variable yield securities]

2

Participating interests

(a) Credit institutions

(b) Other participating interests

3

Investments in subsidiary undertakings

(a) Credit institutions

(b) Other subsidiary undertakings

4

Other investments

D

INTANGIBLE FIXED ASSETS

E

TANGIBLE FIXED ASSETS

(a) Land and buildings

(b) Plant and machinery

(d) Payments on account and assets in the course of construction

F

OTHER ASSETS

G

PREPAYMENTS AND ACCRUED INCOME

H

TOTAL ASSETS

Liabilities

A

(a) Held by individuals

(b) Other shares

B

AMOUNTS OWED TO CREDIT INSTITUTIONS

(a) Repayable on demand

(b) With agreed maturity dates or periods of notice

C

AMOUNTS OWED TO OTHER CUSTOMERS

(a) Repayable on demand

b

With agreed maturity dates or periods of notice

D

DEBT SECURITIES IN ISSUE

(a) Certificates of deposit

(b) Fixed and floating rate notes

E

OTHER LIABILITIES

(a) Income tax

(b) Corporation tax

F

ACCRUALS AND DEFERRED INCOME

G

PROVISIONS FOR LIABILITIES

(a) Provisions for pensions and similar obligations

(b) Provisions for tax

H

SUBORDINATED LIABILITIES

I

SUBSCRIBED CAPITAL

J

REVALUATION RESERVE

K

RESERVES

(a) General reserves

(b) Other reserves

L

TOTAL LIABILITIES

Memorandum items

A

CONTINGENT LIABILITIES

(a) Acceptances and endorsements

(b) Guarantees and assets pledged as collateral security

B

COMMITMENTS

(a) Commitments arising out of sale and repurchase transactions

(b) Other commitments

PART II — FORMAT OF CONSOLIDATED BALANCE SHEET

Assets

A

LIQUID ASSETS

1

Cash in hand and balances with the Bank of England

2

Treasury bills and other eligible bills

(a) Treasury bills and similar securities

(b) Other eligible bills

3

Loans and advances to credit institutions

(a) Repayable on demand

(b) Other loans and advances

4

Debt securities [and other fixed income securities]

(a) Issued by public bodies

(b) Issued by other borrowers

5

Other liquid assets

B

LOANS AND ADVANCES TO CUSTOMERS

1

Loans fully secured on residential property

2

Other loans

(a) Loans fully secured on land

(b) Other loans

C

INVESTMENTS

1

Equity shares [and other variable yield securities]

2

Interests in associated undertakings

(a) Credit institutions

(b) Other associated undertakings

3

Other participating interests

(a) Credit institutions

(b) Other participating interests

4

Investments in unconsolidated subsidiary undertakings

(a) Credit institutions

(b) Other subsidiary undertakings

5

Other investments

D

INTANGIBLE FIXED ASSETS

E

TANGIBLE FIXED ASSETS

(a) Land and buildings

(b) Plant and machinery

(d) Payments on account and assets in the course of construction

F

OTHER ASSETS

G

PREPAYMENTS AND ACCRUED INCOME

H

TOTAL ASSETS

Liabilities

A

(a) Held by individuals

(b) Other shares

B

AMOUNTS OWED TO CREDIT INSTITUTIONS

(a) Repayable on demand

(b) With agreed maturity dates or periods of notice

C

AMOUNTS OWED TO OTHER CUSTOMERS

(a) Repayable on demand

(b) With agreed maturity dates or periods of notice

D

DEBT SECURITIES IN ISSUE

(a) Certificates of deposit

(b) Fixed and floating rate notes

E

OTHER LIABILITIES

(a) Income tax

(b) Corporation tax

F

ACCRUALS AND DEFERRED INCOME

G

PROVISIONS FOR LIABILITIES

(a) Provisions for pensions and similar obligations

(b) Provisions for tax

H

SUBORDINATED LIABILITIES

I

SUBSCRIBED CAPITAL

J

REVALUATION RESERVE

K

RESERVES

(a) General reserves

(b) Other reserves

L

MINORITY INTERESTS

M

TOTAL LIABILITIES

Memorandum items

A

CONTINGENT LIABILITIES

(a) Acceptances and endorsements

(b) Guarantees and assets pledged as collateral security

B

COMMITMENTS

(a) Commitments arising out of sale and repurchase transactions

(b) Other commitments

PART III — PROVISIONS APPLICABLE TO PARTS I AND II

1

In respect of Asset items A.2 to A.4 and B and Liability items B to D and H, the following shall be shown either by subdivision of the relevant items or by way of notes to the accounts—

(a) in the case of such items in Part I, claims on, or liabilities to, subsidiary undertakings;

(b) in the case of such items in Part II, claims on, or liabilities to, any unconsolidated subsidiary undertakings; and

(c) in the case of such items in both Parts I and II, claims on, or liabilities to, any undertaking in which the society has a participating interest (including, in the case of a group accounts society, any associated undertaking).

2

(1) The amount of any assets that are subordinated must be shown either as a subdivision of any relevant asset item or in the notes to the accounts; in the latter case disclosure shall be by reference to the relevant asset item or items in which the assets are included.

(2) The amounts required to be shown in respect of paragraph 1 shall be further subdivided to show the amounts of any assets or liabilities which are subordinated.

(3) For the purposes of sub-paragraphs (1) and (2), assets or liabilities are subordinated if there is a contractual obligation to the effect that in the event of winding up or bankruptcy they are to be repaid only after the claims of other creditors have been met (other than any creditors ranking pari passu with those liabilities) whether or not a ranking has been agreed between the subordinated creditors concerned.

3

(1) This paragraph applies to Asset item A in each of Parts I and II.

(2) There shall be included in Asset item A.1—

(a) banknotes or coinage of any country or territory;

(b) deposits with the Bank of England which may be withdrawn without notice; all other claims on central or post office banks shall be included in Asset item A.3 or B.

(3) There shall be included in Asset item A.2(a) Treasury bills and similar debt instruments issued by public bodies which are eligible for refinancing with the Bank of England. Any Treasury bills or similar debt instruments not so eligible shall be included under Asset item A.2(b).

(4) There shall be included in Asset item A.2(b) all bills that have been purchased to the extent that they are eligible for refinancing with the Bank of England other than those bills included in Asset item A.2(a).

(5) There shall be included in Asset item A.3 all deposits with, but excluding any debt securities issued or guaranteed by, any credit institution.

(a) Asset item A.4 shall comprise transferable debt securities issued or guaranteed by any credit institution or by other undertakings or public bodies.

(b) Debt securities issued by public bodies shall however, only be included in this item if they may not be shown under Asset item A.2.

(c) Where a society holds its own debt securities these shall not be included under this item but shall be deducted from the appropriate liabilities item.

(d) Securities bearing interest rates that vary in accordance with specific factors, for example the interest rate on the inter-bank market or on the Euromarket, shall also be regarded as debt securities to be included under this item.

(e) Fixed income securities shall be included in Asset item A.4 to the extent that they are not included in Asset item A.2.

(7) For the purposes of this paragraph—

“deposit” means a sum of money paid on terms—under which it will be repaid, with or without interest or a premium, and either on demand or at a time or in circumstances agreed by or on behalf of the person making the payment and the person receiving it; andwhich are not referable to the provision of property or services or the giving of security; and,for the purposes of this definition, money is paid on terms which are referable to the provision of property or services or to the giving of security if, and only if—it is paid by way of advance or part payment under a contract for the sale, hire or other provision of property or service, and is repayable only in the event that the property or service is not or are not in fact sold, hired or otherwise provided;it is paid by way of security for the performance of a contract or by way of security in respect of loss which may result from the non performance of a contract; orwithout prejudice to sub-paragraph (ii) above, it is paid by way of security for the delivery up or return of any property, whether in a particular state of repair or otherwise; and

“Treasury bills” means bills issued by Her Majesty’s Government in the United Kingdom and Northern Ireland Treasury Bills.

4

Asset item B.1 in each of Parts I and II shall comprise all loans within the term “Y” in section 6(2) of the Act[^f00011].

5

Asset item B.2(a) in each of Parts I and II shall comprise all loans fully secured on land within the meaning of section 6B of the Act[^f00012] other than those included under Asset item B.1.

6

(a) Asset item D in each of Parts I and II shall comprise—

(i) development costs;

(ii) concessions, patents, licences, trade marks and similar rights and assets;

(iii) goodwill; and

(iv) payments on account relating to intangible fixed assets.

(b) Amounts shall be included in respect of the assets mentioned in sub-paragraph (a)(ii) only if they were acquired for valuable consideration or if they were created by the society or by a subsidiary undertaking.

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

(d) There shall be disclosed, in a note to the accounts the amount of any goodwill included in Asset item D in each of Parts I and II.

7

Asset item G in each of Parts I and II shall include any expenditure incurred during the financial year but relating to a subsequent financial year, together with any income which, although relating to the financial year in question, is not due until after its expiry, except that it shall not include accrued interest in respect of Asset items A and B in each of Parts I and II which accrued interest shall be included under those items.

8

Liability item A(a) in each of Parts I and II shall exclude shares held by individuals as bare trustees (or, in Scotland, simple trustees) for bodies corporate or for persons who include bodies corporate.

9

For the purpose of Liability item D in each of Parts I and II—

(a) “certificate of deposit” means a certificate relating to money deposited with the issuer which recognises an obligation to pay a stated amount to bearer or to order, with or without interest, and by the delivery of which, with or without endorsement, the right to receive that stated amount, with or without interest is transferable;

(b) “floating rate note” means a note which embodies a right, transferable to any person by delivery or by a method specified in the note, to receive a principal sum and interest at a rate which is variable at times specified in the note; and

(c) “fixed rate note” means a note which embodies a right, transferable to any person by delivery or by a method specified in the note, to receive a principal sum and interest at a rate which is fixed as specified in the note.

10

Liability item F in each of Parts I and II shall include any income relating to a subsequent financial year, together with any charges which although relating to the financial year in question, will be payable only in the course of a subsequent financial year, except that it shall not include accrued interest in respect of Liability items A to D in Parts I and II, which accrued interest shall be included under those items.

11

(1) Liability item H in each of Parts I and II shall comprise all liabilities in respect of which there is a contractual obligation that, in the event of winding up or bankruptcy, they are to be repaid only after the claims of other creditors have been met. All subordinated liabilities shall be included, whether or not a ranking has been agreed between the subordinated creditors concerned.

(2) Any subordinated loan capital of the society shall be included in Liability item H in each of Parts I and II and in no other such Liability item, but this requirement shall not be taken to exclude the obligation to include in Liability item H in part II subordinated liabilities of subsidiary undertakings.

12

Liability item I in each of Parts I and II shall comprise deferred shares.

13

Memorandum item A in each of Parts I and II shall include all transactions whereby the society (or the society and its subsidiary undertakings in respect of Part II) has underwritten the obligations of a third party.

14

Memorandum item A(b) in each of Parts I and II shall include all guarantee obligations incurred and assets pledged as collateral on behalf of third parties by the society (or the society and its subsidiary undertakings in respect of Part II).

15

Memorandum item B in each of Parts I and II shall include every irrevocable commitment which would give rise to a credit risk to the society (or the society and its subsidiary undertakings in respect of Part II).

16

(1) The following rules apply where a society (or the society and its subsidiary undertakings in respect of Part II) is a party to a sale and repurchase transaction.

(2) Where the society is the transferor of the assets under the transaction—

(a) the assets transferred shall, notwithstanding the transfer, be included in its balance sheet;

(b) the purchase price received by it shall be included in its balance sheet as an amount owed to the transferee; and

(3) Where the society is the transferee of the assets under the transaction it shall not include the assets transferred in its balance sheet but the purchase price paid by it to the transferor shall be so included as an amount owed by the transferor.

17

(1) For the purpose of this paragraph “managed funds” are funds which the society (or the society and its subsidiary undertakings in respect of Part II) administers in its own name but on behalf of others and to which it has legal title.

(2) Where claims and obligations arising in respect of managed funds fall to be treated as claims and obligations of the society (or the society and its subsidiary undertakings in the case of Part II) such claims and obligations representing managed funds are to be included in the balance sheet, with notes to the accounts disclosing the total amount included with respect to such assets and liabilities in the balance sheet and showing the amount included under each relevant balance sheet item in respect of such assets or (as the case may be) liabilities.

18

(1) Where a society (or the society and its subsidiary undertakings in the case of Part II) is a party to a syndicated loan transaction, it shall include in the balance sheet only that part of the total loan which it has funded itself.

(2) Where a society (or the society and its subsidiary undertakings in the case of Part II) is a party to a syndicated loan transaction and has agreed to reimburse (in whole or in part) any other party to the syndicate any funds advanced by that party or any interest thereon upon the occurrence of any event including the default of the borrower, any additional liability by reason of such a guarantee shall be included as a contingent liability in Memorandum item A(b) in each of Parts I and II.

SCHEDULE 3

PART I — FORMAT OF SOCIETY STATEMENT OF THE SOURCE AND APPLICATION OF FUNDS

PART II — FORMAT OF CONSOLIDATED STATEMENT OF THE SOURCE AND APPLI CATION OF FUNDS

PART III — PROVISIONS APPLICABLE TO PARTS I AND II

1

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

SCHEDULE 4 — FORM AND CONTENT OF THE ANNUAL ACCOUNTS OF A GROUP ACCOUNTS SOCIETY

General rules

1

(1) The consolidated income and expenditure account and the consolidated balance sheet shall—

(a) incorporate in full the information contained in the individual accounts of the subsidiary undertakings included in the consolidation, subject to the adjustments authorised or required by the following provisions of this Schedule and to such other adjustments (if any) as may be appropriate in accordance with generally accepted accounting principles or practice; and

(b) comply so far as practicable with the provisions of Schedule 5 (except paragraphs 4 to 11, 13, 14(3)(b) and 35 thereof) and Schedule 7 as if the undertakings included in the consolidation were a single society.

(2) If the financial year of a subsidiary undertaking included in the consolidation does not end with that of the society, the group accounts shall be made up—

(a) from the accounts of the subsidiary undertaking for its financial year last ending before the end of the society’s financial year, provided that year ended no more than three months before that of the society; or

(b) from interim accounts prepared by the subsidiary undertaking as at the end of the parent society’s financial year.

2

(1) Where assets and liabilities to be included in the consolidated balance sheet have been valued or otherwise determined by subsidiary undertakings according to accounting rules differing from those used in the annual accounts of a group accounts society, the values or amounts shall be adjusted so as to accord with the rules used for the annual accounts of the group accounts society.

(2) If it appears to the directors of the society that there are special reasons for departing from the requirements of sub-paragraph (1) they may do so, but particulars of any such departure, the reasons for it and its effect shall be given in a note to the accounts.

(3) The adjustments referred to in this paragraph need not be made if they are not material for the purpose of giving a true and fair view for the society and its subsidiary undertakings, as a whole of the matters set out in subsection (2) of section 72F of the Act.

3

Any differences of accounting rules as between a society’s individual accounts for a financial year and its consolidated accounts shall be disclosed in a note to the accounts and the reasons for the differences given.

4

Amounts which in the particular context of any provision of this Schedule are not material may be disregarded for the purposes of that provision.

Elimination of group transactions

5

(1) Debts and claims between undertakings included in the consolidation, and income and expenditure relating to transactions between such undertakings, shall be eliminated in preparing the consolidated accounts.

(2) Where profits and losses resulting from transactions between undertakings included in the consolidation are included in the book value of assets, they shall be eliminated in preparing the group accounts.

(3) The elimination required by sub-paragraph (2) may be effected in proportion to the society’s interest in the shares of the undertakings.

(4) Sub-paragraphs (1) and (2) need not be complied with if the amounts concerned are not material for the purpose of giving a true and fair view for the society and its subsidiary undertakings as a whole of the matters set out in subsections (2) and (3) of section 73 of the Act.

Acquisition accounting

6

(1) The following provisions apply where an undertaking becomes a subsidiary undertaking of the society.

(2) That event is referred to in those provisions as an “acquisition”, and references to the “undertaking acquired” shall be construed accordingly.

7

An acquisition shall be accounted for by the acquisition method of accounting, unless the conditions for accounting for it as a merger as set out in paragraph 10 of Schedule 6 to the Large and Medium–sized Companies and Groups (Accounts and Reports) Regulations 2008 are met, in which case the merger method of accounting as detailed in paragraph 11 of the said Schedule 6 shall be employed.

8

(1) The acquisition method of accounting is set out in the following sub-paragraphs.

(2) The identifiable assets and liabilities of the undertaking acquired shall be included in the consolidated balance sheet at their fair values as at the date of acquisition.

(3) In this paragraph the “identifiable” assets or liabilities of the undertaking acquired means the assets or liabilities which are capable of being disposed of or discharged separately, without disposing of a business of the undertaking.

(4) The income and expenditure of the undertaking acquired shall be brought into the annual accounts of a group accounts society only as from the date of the acquisition.

(5) There shall be set off against the acquisition cost of the interest in the shares of the undertaking held by the society and its subsidiary undertakings the interest of the society and its subsidiary undertakings in the adjusted capital and reserves of the undertaking acquired, and for this purpose—

“the acquisition cost” means the amount of any cash consideration and the fair value of any other consideration, together with such amount (if any) in respect of fees and other expenses of the acquisition as the society may determine; and

“the adjusted capital and reserves” of the undertaking acquired means its capital and reserves at the date of the acquisition after adjusting the identifiable assets and liabilities of the undertaking to fair values as at that date.

(6) The resulting amount shall be treated, if positive, as goodwill, and if negative as a negative consolidation difference.

9

(1) Where a group is acquired paragraph 8 applies with the adaptations set out in sub-paragraphs (2) and (3).

(2) References to shares of the undertaking acquired shall be construed as references to shares of the parent undertaking of the group.

(3) Other references to the undertaking acquired shall be construed as references to the group; and references to the assets and liabilities, income and expenditure and capital and reserves of the undertaking acquired shall be construed as references to the assets and liabilities, income and expenditure and capital and reserves of the group after making the set-offs and other adjustments required by this Schedule in the case of group accounts.

10

(1) The following information with respect to acquisitions taking place in the financial year shall be given in a note to the accounts—

(a) the name of the undertaking acquired or, where a group was acquired, the name of the parent undertaking of that group;

(b) whether the acquisition was accounted for by the acquisition method or by the merger method of accounting.

(2) In relation to an acquisition which significantly affects the figures shown in the annual accounts of a group accounts society the following further information shall be given—

(a) the composition and fair value of the consideration for the acquisition given by the society and its subsidiary undertaking;

(b) where the acquisition method of accounting has been adopted, the book values immediately prior to the acquisition, and the fair values at the date of acquisition, of each class of assets and liabilities of the undertaking or group acquired, in tabular form, including a statement of the amount of any goodwill or negative consolidation difference arising on the acquisition, together with an explanation of any significant adjustments made; and

(c) where the merger method of accounting has been adopted, an explanation shall be given of any significant adjustments made in relation to the amounts of the assets and liabilities of the undertaking or group acquired, together with a statement of any resulting adjustment to the consolidated reserves (including the restatement of opening consolidated reserves).

(3) In ascertaining for the purposes of sub-paragraph (2)(b) and (2)(c) the book values and fair values of assets and liabilities of a group or the amount of the assets and liabilities of a group, the set-offs and other adjustments required by this Schedule in the case of the annual accounts of a group accounts society shall be made.

11

(1) There shall be stated in a note to the accounts the cumulative amount of goodwill resulting from acquisitions in that and earlier financial years which has been written off otherwise than in the consolidated income and expenditure account for that or any earlier financial year.

(2) That figure shall be shown net of any goodwill attributable to a subsidiary undertaking disposed of prior to the balance sheet date.

12

Where during the financial year there has been a disposal of a subsidiary undertaking or group which significantly affects the figures shown in the annual accounts of a group accounts society, there shall be stated in a note to the accounts—

(a) the name of that undertaking or, as the case may be, of the parent undertaking of that group; and

(b) the extent to which the profit or loss shown in the group accounts is attributable to profit or loss of that subsidiary undertaking or group.

13

The information required by paragraph 10, 11 or 12 need not be disclosed with respect to a subsidiary undertaking which—

(a) is established under the law of a country outside the United Kingdom; or

(b) carries on business outside the United Kingdom,

if in the opinion of the directors of the society the disclosure would be seriously prejudicial to the business of that subsidiary undertaking or to the business of the society or any of its subsidiary undertakings and the appropriate authority agrees that the information should not be disclosed.

14

For the purposes only of paragraphs 9, 10, 12 and 13, a “group” is a “parent undertaking”and its “subsidiary undertakings” as defined by section 1162 of the Companies Act 2006, where the parent undertaking is a subsidiary undertaking of the society.

Minority interests

15

(1) Under item 19 in Part II of Schedule 1 shall be shown the amount of any profit or loss on ordinary activities after tax attributable to shares in subsidiary undertakings included in the consolidation held by or on behalf of persons other than the society and its subsidiary undertakings.

(2) Under item 26 in Part II of Schedule 1 shall be shown the amount of any profit or loss on extraordinary activities after tax attributable to shares in subsidiary undertakings included in the consolidatiokn held by or on behalf of persons other than the society and its subsidiary undertakings.

(3) Under Liability item L in Part II of Schedule 2 shall be shown the amount of capital and reserves attributable to shares in subsidiary undertakings included in the consolidation held by or on behalf of persons other than the society and its subsidiary undertakings.

Interests in subsidiary undertakings excluded from consolidation

16

The interest of the society in subsidiary undertakings excluded from consolidation under regulation 4(5), and the amount of income or expenditure attributable to such an interest, shall be shown in the consolidated balance sheet or, as the case may be, in the consolidated income and expenditure account by the equity method of accounting (and this shall include dealing with any goodwill arising in accordance with paragraphs 8 to 10 and 12 of Schedule 7).

Foreign currency translation

17

(1) Any difference between—

(a) the amount included in the consolidated balance sheet for the previous financial year with respect to the group’s interest in any undertaking included in the consolidation or in any associated undertaking, together with the amount of any transactions undertaken to cover any such interest; and

(b) the opening amount for the financial year in respect of the group’s interest in such undertakings and in respect of any such transactions,

arising as a result of the application of paragraph 32 of Schedule 7 may be credited to (where (a) is less than(b)), or (as the case may be) deducted from (where (a) is greater than (b)), the consolidated general reserve.

(2) Any income and expenditure of subsidiary undertakings and associated undertakings in a foreign currency may be translated for the purposes of the consolidated income and expenditure account at the average rates of exchange prevailing during the financial year.

SCHEDULE 5 — NOTES TO ANNUAL ACCOUNTS

Accounting policies

1

(1) There shall be stated the accounting policies (including such policies with respect to the depreciation and diminution in value of the assets of the society) adopted by the society in determining the amounts to be included in respect of items shown in the income and expenditure account and the balance sheet.

(2) It shall be stated whether the accounts have been prepared in accordance with applicable accounting standards within the meaning of section 464(1) of the Companies Act 2006; particulars of any material departure from these standards and the reasons for such departure shall be given.

Sums denominated in foreign currencies

2

Where any sums originally denominated in a foreign currency have been brought into account under any items shown in the balance sheet or income and expenditure account formats, the basis on which those sums have been translated into sterling shall be stated.

Employees

3

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Aggregate amount of directors' remuneration etc.

4

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Details of individual directors' remuneration etc.

5

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Excess retirement benefits of directors and past directors

6

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Compensation to directors for loss of office

7

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Sums paid to third parties in respect of directors' services

8

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Supplementary provisions regarding directors' remuneration

9

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

10

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

11

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

12

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Interpretation of provisions regarding directors' remuneration

13

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other income and expenditure items

14

(1) In respect of interest receivable, the amount of interest derived from connected undertakings shall be shown separately from interest derived from other sources.

(2) In respect of interest payable, the amount payable to connected undertakings shall be shown separately.

(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(a) Where any amount to be included in any of the items mentioned in sub-paragraph (b) is material, particulars shall be given of such amounts together with an explanation of their nature.

(b) The items mentioned in sub-paragraph (a) are—

(i) in Part I of Schedule 1, items 4(b) to (d), 5 to 8, 11, 19 and 20; and

(ii) in Part II of Schedule 1, items 4(b) to (e), 5 to 8, 11, 21 and 22.

(7) There shall be shown in a note, with respect to each of the items of income mentioned below and included in the income and expenditure account formats in Schedule 1, the amount of income in respect of that item attributable to each of the geographical markets in which the society has operated during the financial year—

(a) Item 1 in Parts I and II (Interest receivable and similar income)

(b) Item 4 in Parts I and II (Income from investments)

(d) Item 7 in Parts I and II (Net profit or loss on financial operations) and

(e) Item 8 in Parts I and II (Other operating income)

(8) In analysing the source of any income for the purpose of sub-paragraph (7), the directors shall have regard to the manner in which the society’s activities are organised.

(9) For the purposes of sub-paragraph (7), markets which do not differ substantially from one another shall be treated as one market.

(10) Where the directors consider that the disclosure of information required by sub-paragraph (7) would seriously prejudice the interests of the society, they need not disclose such information, but the fact that any such information has not been disclosed must be stated.

(11) Any amounts charged to the income and expenditure account and representing costs, including interest payable, incurred during the year with respect to subordinated liabilities shall be stated.

(12) Any amounts charged to the income and expenditure account and representing costs, including interest payable, incurred during the year with respect to subscribed capital, shall be stated.

(13) Where management and agency services are provided by the society to third parties that fact shall be disclosed where the scale of such services is material in the context of the society’s business as a whole.

Persons who are to be regarded as associates of a society’s auditors

15

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Taxation

16

(1) Particulars shall be given of any special circumstances which affect liability in respect of taxation of profits, income or capital gains for the financial year or liability in respect of taxation of profits, income or capital gains for succeeding financial years.

(2) The following amounts shall be stated—

(a) the amount of the charge for United Kingdom corporation tax;

(b) if that amount would have been greater but for relief from double taxation, the amount which it would have been but for such relief; and

(c) the amount of the charge for taxation imposed outside the United Kingdom on profits, income and (so far as charged to the income and expenditure account) capital gains.

(3) The amounts specified in sub-paragraph (2) shall be stated separately in respect of each of the amounts shown under items 17 and 22 in Part I of Schedule 1, and under items 17 and 24 in Part II of that Schedule.

Miscellaneous matters

17

(1) Where any amount relating to any preceding financial years is included in any item in the income and expenditure account, the effect of that inclusion shall be stated.

(2) The effect shall be stated of any transactions that are exceptional by virtue of size or incidence although they fall within the ordinary activities of the society.

Maturity analysis

18

(1) A society shall disclose the aggregate of each of Asset items A.3(b) and B and Liability items A, B(b) and C(b) in Parts I and II of Schedule 2, broken down into amounts repayable with remaining maturity of—

(a) not more than three months;

(b) more than three months but not more than one year;

(d) more than five years.

(2) These shall also be shown—

(a) for Asset item B in Parts I and II of Schedule 2, loans and advances on call and at short notice; and

(b) for Liability item A in Parts I and II of Schedule 2, shares repayable on demand.

(3) The aggregate of amounts classifiable in the balance sheet as Asset item A.4 and Liability item D in Parts I and II of Schedule 2 shall be shown on the basis of remaining maturity as follows—

(a) not more than one year; and

(b) more than one year.

(4) For the purposes of sub-paragraphs (1) and (2), where a loan or advance is repayable by instalments, each such instalment shall be treated as a separate amount.

Provisions for bad and doubtful debts

19

(1) In respect of any provisions for bad and doubtful debts deducted from Asset item B in Parts I and II of Schedule 2 there shall be shown the following information, in respect of each item—

(a) the amount of the provision as at the date of the beginning of the financial year and as at the balance sheet date respectively, showing separately—

(i) specific provisions for bad and doubtful debts, and

(ii) general provisions for bad and doubtful debts.

(b) any amounts transferred to or from each of the provisions referred to in sub-paragraph (a) during the year, and

(2) For the purposes of sub-paragraphs (1) and (2) “specific provisions” shall be any provisions determined by reference to particular loans or advances and all other provisions shall be “general provisions”.

Transferable securities

20

(1) In respect of each of Asset items A.4 and C in Parts I and II of Schedule 2 there shall be shown the amount of transferable securities under those items, stating the amounts of those which are listed and the amount of those which are unlisted.

(2) In the case of each amount shown in respect of listed securities under sub-paragraph (1) there shall also be given the aggregate market value of the securities if it differs from the amount shown.

(3) In respect of each of Asset items A.4 and C in Parts I and II of Schedule 2 there shall be given the amounts of—

(a) transferable securities included under those items and which are held as financial fixed assets, and

(b) those transferable securities which are not so held,

together with the criteria used by the directors of the society to distinguish between those held and those not held as financial fixed assets.

Fixed assets

21

(1) In respect of any fixed assets included in any Asset item in the balance sheet the following information shall be given—

(a) the appropriate amounts in respect of those assets as at the date of the beginning of the financial year and as at the balance sheet date respectively; and

(b) the effect on any amount included in the item, in respect of those assets, of—

(i) any determination during that year of the value to be ascribed to any of those assets on any basis mentioned in paragraph 28 of Schedule 7;

(ii) acquisitions during that year of any fixed assets;

(iii) disposals during that year of any fixed assets; and

(iv) any transfers of fixed assets to and from the item during that year.

(2) The reference in sub-paragraph (1)(a) to the appropriate amounts in respect of any fixed assets (included in an Asset item) as at any date there mentioned is a reference to amounts representing the aggregate amounts determined, as at that date, in respect of fixed assets falling to be included under that item on either of the following bases, that is to say—

(a) on the basis of cost (determined in accordance with paragraphs 22 and 23 of Schedule 7), or

(b) on any basis mentioned in paragraph 28 of Schedule 7,

(leaving out of account in either case any provisions for depreciation or diminution in value).

(3) In respect of any fixed assets included in any Asset item in the balance sheet—

(a) the cumulative amount of provisions for depreciation or diminution in value of those assets included under that item as at each date mentioned in sub-paragraph (1)(a),

(b) the amount of any such provisions made in respect of the financial year,

(c) the amount of any adjustments made in respect of any such provisions during that year in consequence of the disposal of any of those assets, and

(d) the amount of any other adjustments made in respect of any such provisions during that year,

shall be stated.

(4) Where any fixed assets of the society (other than listed investments) are included under any item shown in the society’s balance sheet at an amount determined on any basis mentioned in paragraph 28 of Schedule 7 the following information shall be given—

(a) the years (so far as they are known to the directors) in which the assets were severally valued and the several values; and

(b) in the case of assets valued during the financial year, the names of the persons who valued them, or particulars of their qualifications for doing so, and, whichever is given, the basis of valuation used.

(5) In relation to any amount which is or would but for regulation 3(5) be shown in respect of the item “land and buildings” in the balance sheet there shall be stated—

(a) how much of that amount is ascribable to land of freehold tenure and how much to land of leasehold tenure;

(b) how much of the amount ascribable to land of leasehold tenure is ascribable to land held on long lease and how much to land held on short lease; and

(6) In any case where any goodwill which has been acquired is shown or included as an asset in the balance sheet the period chosen for writing off the consideration for that goodwill and the reasons for choosing that period shall be disclosed.

Reserves and provisions

22

(1) Where any amount is transferred—

(a) to or from any reserves (including the revaluation reserve),

(b) to any provisions for liabilities, or

and the reserves or provisions are shown or would but for regulation 3(5) be shown as separate items in the society’s balance sheet, the information required by the following sub-paragraph shall be given in respect of the aggregate of reserves or provisions included in items in the balance sheet to which any such transfer relates.

(2) The information required by this sub-paragraph is—

(a) the amount of the reserves or provisions as at the date of the beginning of the financial year and as at the balance sheet date respectively,

(b) any amounts transferred to or from the reserves or provisions during that year, and

(3) Particulars shall be given of each provision included in the item “provisions for liabilities” in the balance sheet.

(4) The amount of the provision for deferred taxation shall be stated separately from the amount of any provision for other taxation.

Subordinated liabilities

23

(1) The following information shall be disclosed in relation to any borrowing included in the balance sheet as subordinated liabilities and which exceeds 10 per cent. of the total for that item—

(a) its amount,

(b) the currency in which it is denominated,

(d) the circumstances in which early repayment may be demanded,

(e) the terms of the subordination, and

(f) the existence of any provisions whereby it may be converted into some other form of liability, and the terms of such provisions.

(2) There shall also be stated the general terms of any other borrowings included within subordinated liabilities.

Subscribed capital

24

(1) Where subscribed capital of more than one class has been allotted, the accounting par value of each class allotted shall be disclosed.

(2) The following information shall be disclosed in relation to any class of subscribed capital included in the balance sheet and which exceeds 10 per cent. of the total for that item—

(a) its amount,

(b) the currency in which it is denominated,

(d) the fact that it is borrowing for an indeterminate period, and

(e) the existence of any provisions whereby it may be converted into some other form of liability, and the terms of such provisions.

There shall also be stated the general terms of any other amounts included within subscribed capital.

(3) If the society has allotted any subscribed capital during the year, the following information shall be given—

(a) the classes of subscribed capital allotted, and

(b) as respects each class of subscribed capital the consideration received by the society for the allotment.

Fixed cumulative interest

25

If any fixed cumulative interest on the society’s subscribed capital is in arrears there shall be stated—

(a) the amount of the arrears, and

(b) the period for which the interest or, if there is more than one class of subscribed capital, each class of interest is in arrears.

Details of assets charged

26

In relation to each Liability item and each Memorandum item in the balance sheet formats there shall be disclosed—

(a) the aggregate amount of any assets which have been charged to secure any liability or potential liability included thereunder,

(b) the aggregate amount of the liabilities or potential liabilities so secured, and

27

Particulars shall be given of any charge on the assets of the society to secure the liabilities of any other person, including, where practicable, the amount secured.

Guarantees and other financial commitments

28

(1) There shall be stated, where practicable, the aggregate amount or estimated amount of contracts for capital expenditure, so far as not provided for in the balance sheet.

(2) Particulars shall be given of—

(a) any pension commitments included under any provision shown in the balance sheet, and

(b) any such commitment for which no such provision has been made,

and, where any such commitment relates wholly or partly to pensions payable to past directors of the society separate particulars shall be given of that commitment so far as it relates to such pensions.

(3) Particulars shall also be given of any other financial commitments, including contingent liabilities, which have not been provided for in the balance sheet, have not been included in the memorandum items in the balance sheet and are relevant to assessing the society’s state of affairs at the end of the financial year.

(4) Commitments within any of the preceding sub-paragraphs undertaken on behalf of or for the benefit of any subsidiary undertakings of the society shall be stated separately from the other commitments within that sub-paragraph.

(5) No disclosure need be made under sub-paragraph (3) or (4) to the extent that an amount with respect to a commitment has been included in the Memorandum items in the balance sheet.

(6) There shall be disclosed the nature and amount of any contingent liabilities and commitments included in Memorandum items A and B in Parts I and II of Schedule 2.

Memorandum items: subsidiary undertakings

29

(1) With respect to contingent liabilities required to be included under Memorandum item A in Part I of Schedule 2, there shall be stated the amount of such contingent liabilities incurred on behalf of or for the benefit of any subsidiary undertakings.

(2) With respect to commitments required to be included under Memorandum item B in Part I of Schedule 2, there shall be stated the amount of such commitments undertaken on behalf of or for the benefit of any subsidiary undertakings.

Leasing transactions

30

The aggregate amount of all assets (other than land) leased to other persons shall be disclosed, broken down so as to show the aggregate amount included in each relevant balance sheet item.

Assets and liabilities denominated in a currency other than sterling

31

(1) The aggregate amount, in sterling, of all assets denominated in a currency other than sterling, together with the aggregate amount, in sterling, of all liabilities so denominated, shall be disclosed.

(2) For the purposes of this paragraph, an appropriate rate of exchange prevailing at the date of the balance sheet shall be used.

Sundry assets and liabilities, prepayments and accrued income and accruals and deferred income

32

Where any amount to be included under any of Asset items F and G and Liability items E(c) and F in Parts I and II of Schedule 2 is material, particulars shall be given of each type of asset or liability included therein, including an explanation of the nature of the asset or liability and the amount included with respect to assets or liabilities of that type.

Unmatured forward transactions

33

There shall be disclosed with respect to forward transactions unmatured at the date of the balance sheet the categories of such transactions, by reference to an appropriate system of classification.

Other miscellaneous matters

34

(1) Subject to the following sub-paragraph, in respect of every item stated in a note to the annual accounts the corresponding amount for the financial year immediately preceding that to which the accounts relate shall also be stated and where it is not reasonable to compare the corresponding amount, it shall be adjusted and particulars of the adjustment and the reasons for it shall be given.

(2) Sub-paragraph (1) does not apply in relation to any amounts stated by virtue of any of the following provisions—

(a) paragraphs 5(1), 7(1) and (2), 19, 21(1) to (4)(b), 22(1) and (2) and 35 of this Schedule,

(b) paragraph 10 of Schedule 4, and

(3) Particulars shall be given of any case where the cost of any asset is for the first time determined under paragraph 25 of Schedule 7.

Directors' loans and transactions

35

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

SCHEDULE 6 — NOTES TO ANNUAL ACCOUNTS: INFORMATION IN RESPECT OF HOLDINGS IN UNDERTAKINGS

PART I — SOCIETIES NOT REQUIRED TO PREPARE CONSOLIDATED ACCOUNTS

Subsidiary undertakings

1

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Holdings in subsidiary undertakings

2

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Financial information about subsidiary undertakings

3

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Financial years of subsidiary undertakings

4

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Significant holdings in undertakings other than subsidiary undertakings

5

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Construction of references to shares held by society

8

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

PART II — SOCIETIES REQUIRED TO PREPARE CONSOLIDATED ACCOUNTS

Subsidiary undertakings

9

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Holdings in subsidiary undertakings

10

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Financial information about subsidiary undertakings not included in the consolidation

11

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Associated undertakings

12

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