A Closer look — Capital maintenance and distributions under the spotlight

Published on: 18 Sep, 2019

Companies’ capital allocation and dividend policies are a specific area of investor focus and high up on the political agenda. Investors now expect greater transparency around dividend policy and capital allocation and some are calling for an audited figure for distributable reserves.  Further calls for improvements have come from the government and the Investment Association who have called on all listed companies to include their distribution policy within their annual report and accounts.

With the introduction of new strategic report requirements, effective for accounting periods beginning on or after 1 January 2019, it is expected that disclosure will improve.  However, if those requirements and investor pressure do not improve disclosure, the government has indicated that it will move to mandate disclosure of capital allocation and dividend policy by companies.

This Closer look publication explores the fundamentals of the UK Capital maintenance regime, identifies common pitfalls that are often encountered in practice and highlights expectations regarding disclosure including a number of better practice examples.


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