Companies (Amendment) Act, 1986
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Format of accounts. |
4.—(1) Subject to the provisions of this section, every balance sheet of a company shall show the items listed in either of the balance sheet formats set out in the Schedule to this Act and every profit and loss account of a company shall show the items listed in any one of the profit and loss accounts formats so set out in either case in the order and under the headings and sub-headings given in the format adopted. | |
(2) Subsection (1) of this section shall not be construed as requiring the heading or sub-heading for any item in the balance sheet, or profit and loss account, of a company to be distinguished by any letter or number assigned to that item in the formats set out in the Schedule to this Act. | ||
(3) Where the balance sheet, or profit and loss account, of a company has been prepared by reference to one of the formats set out in the Schedule to this Act, the directors of the company shall adopt the same format in preparing the accounts for subsequent financial years unless, in their opinion, there are special reasons for a change. | ||
(4) Where any change is made in accordance with subsection (3) of this section in the format adopted in preparing a balance sheet, or profit and loss account, of a company, the reasons for the change, together with full particulars of the change, shall be given in a note to the accounts in which the new format is first adopted. | ||
(5) Any item required in accordance with the Schedule to this Act to be shown in the balance sheet, or profit and loss account, of a company, may be shown in greater detail than that required by the format adopted. | ||
(6) Any items to which an Arabic number is assigned in any of the formats set out in the Schedule to this Act may be combined in the accounts of a company— | ||
(a) in any case where the individual amounts of such items are not material to assessing the state of affairs or profit or loss of the company for the financial year concerned, or | ||
(b) in any case where the combination of such items facilitates that assessment. | ||
(7) Where items are combined in a company's accounts pursuant to subsection (6) (b) of this section, the individual amounts of any items so combined shall be disclosed in a note to the accounts. | ||
(8) In respect of every item shown in the balance sheet, or profit and loss account, of a company, the corresponding amount for the financial year immediately preceding that to which the balance sheet or profit and loss account refers shall also be shown and, if 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 shall be adjusted, and particulars of the adjustment and the reasons therefor shall be given in a note to the accounts. | ||
(9) Subject to subsection (10) of this section, a heading or subheading corresponding to an item listed in the format adopted in preparing the balance sheet, or profit and loss account, of a company, shall not be included in the balance sheet or profit and loss account, as the case may be, 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. | ||
(10) Subsection (9) of this section shall 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 the format adopted as aforesaid. | ||
(11) Amounts in respect of items representing assets or income may not be set off in the accounts of a company against amounts in respect of items representing liabilities or expenditure, as the case may be, or vice versa. | ||
(12) The balance sheet, or profit and loss account, of a company may include an item representing or covering the amount of any asset or liability or 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 the balance sheet of a company— | ||
(a) preliminary expenses, | ||
(b) expenses of, and commission on, any issue of shares or debentures, and | ||
(c) costs of research. | ||
(13) In preparing the balance sheet, or profit and loss account, of a company, the directors of the company shall adapt the arrangement and headings and sub-headings otherwise required by subsection (1) of this section 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. | ||
(14) Every profit and loss account of a company shall show the amount of the profit or loss of the company on ordinary activities before taxation. | ||
(15) The profit and loss account of a company for a financial year shall show— | ||
(a) separately, the aggregate amount of the dividends paid and the aggregate amount of the dividends proposed to be paid, | ||
(b) any transfer between the profit and loss account and reserves, | ||
(c) any increase or reduction in the balance on the profit and loss account since the immediately preceding financial year. | ||
(d) the profit or loss brought forward at the beginning of the year, and | ||
(e) the profit or loss carried forward at the end of the year. |