Medium sized groups - consolidated accounts
Date: Wednesday 3rd June, 2009
Author: Paul Maberly
Profile: Paul Maberly
Under the 1985 companies act, medium sized groups were exempt from preparing consolidated accounts. This exemption has been abolished in the 2006 companies act
Under the 1985 Companies Act, medium sized groups were exempt from preparing consolidated accounts. This exemption has been abolished in the 2006 Companies Act – effective for accounting periods beginning 6 April 2008.
This means that a time consuming consolidation process needs to be undertaken for a new tranche of companies, causing more accountants in the UK to experience the usual problems with goodwill calculations, intra-group trading, translation differences etc.
As a reminder, the size parameters for medium groups were changed to:
Net turnover - £6.5m to £25.9m
Gross turnover - £7.8m to £31.1m
Net balance sheet - £3.26m to £12.9m
Gross balance sheet - £3.9m to £15.5m
Any businesses which have subsidiaries should review this situation – it can be worth restructuring the group to avoid incurring the time and costs involved in the consolidation procedure.
Paul Maberly is a partner at Mercer & Hole – please click here for contact details.
Keywords: '1985 Companies Act' '2006 Companies Act' 'Medium sized groups' 'Consolidated accounts'
Please note that the opinions expressed in this blog represent the views of the author and not the views of Mercer & Hole.