This site uses cookies to provide you with a more responsive and personalised service. By using this site you agree to our use of cookies. Please read our cookie notice for more information on the cookies we use and how to delete or block them.
The full functionality of our site is not supported on your browser version, or you may have 'compatibility mode' selected. Please turn off compatibility mode, upgrade your browser to at least Internet Explorer 9, or try using another browser such as Google Chrome or Mozilla Firefox.

Need to know - Annual reports need full listing of subsidiaries from 1 July 2015

Published on: 25 Jun 2015

The Regulations which implement the EU Accounting Directive (SI 2015/980) remove the concession under s410 Companies Act 2006 whereby companies can list only their ‘principal’ subsidiaries and other significant holdings in their annual accounts and file a complete list with their annual return; for accounts approved on or after 1 July 2015 a complete list will need to be included in the notes to the financial statements under s409 of the Act. Companies with numerous subsidiaries should give urgent consideration as to how best to meet this new requirement.

This change does not alter which entities need to produce such a list, nor the content of the complete list. The only change is that the full list must now be included in the financial statements. The amount of information required for each underlying entity continues to vary depending on whether it is a subsidiary, a joint venture, an associate or another significant holding and whether the parent/investor entity is required to prepare group accounts. However, it is worth noting that even intermediate parents that are exempt from preparing consolidated accounts should present certain prescribed information, such as the name of each subsidiary undertaking.

This move has been driven by demands for greater transparency and concern that over several years a significant proportion of FTSE 350 companies included neither a full list in their financial statements nor filed a complete list with the annual return. This issue has been the subject of significant NGO activism. In practice, this change would most likely have been made in any case when the requirement for an annual return is removed in 2016.

A further change will come into force for periods commencing on or after 1 January 2016 whereby the address of the registered office of each subsidiary or significant holding must be given rather than the country of incorporation. This requirement has always been in EU law but was not transposed into UK law. Where practicable, companies may wish to align the registered offices of companies in various states to reduce the length of this disclosure. For periods commencing on or after 1 January 2016 those parents eligible for the small companies’ regime who choose not to prepare consolidated accounts will not need to provide the listing of subsidiaries and other significant holdings. A variety of other changes to corporate reporting will also become effective at that time.

Note that there is not a pdf version available for download on this short item.

Need to know — IASB proposes amendments to IAS 1 to clarify the criteria for the classification of a liability as either current or non-current  Image

Correction list for hyphenation

These words serve as exceptions. Once entered, they are only hyphenated at the specified hyphenation points. Each word should be on a separate line.