UITF Information Sheet 79

This information sheet sets out a proposed UITF Abstract ‘The interpretation of equivalence for the purposes of section 228A of the Companies Act 1985’.

The Companies Act has been amended to include an exemption, subject to certain conditions, from the requirement for an intermediate parent undertaking to prepare consolidated accounts when its parent entity is not established under the law of an EEA state.

One of the conditions is that the intermediate parent and all of its subsidiaries are included in consolidated accounts for a larger group drawn up in accordance with the provisions of the Seventh Directive or in a manner equivalent to consolidated accounts so drawn up.

Questions have been raised as to whether financial statements drawn up in accordance with IFRS, US GAAP and other GAAPs meet the requirement for ‘equivalence’ with the Seventh Directive.