Where the parent company or a ‘holding company’ prepare group financial statements, the individual entity financial statements of the holding company shall be prepared in line with section 290 of the Act (obligation to prepare entity financial statements under relevant financial reporting framework) and they shall be included in the group financial statements. Together, the group financial statements and the holding company financial statements shall constitute the statutory financial statements of the company.
There are some reliefs available where the holding company’s individual financial statements accompany the group financial statements. Section 304 permits the exclusion of presenting the holding company’s profit and loss account (and information supplementing the profit and loss account) from the group financial statements where the following conditions are satisfied:
- The company prepares group financial statements;
- The notes to the company’s entity balance sheet contained in the group financial statements show the company’s profit or loss for the financial year; and
- The fact that the exemption has been availed of is disclosed in the group financial statements
Other information referred to above that may be omitted from the holding company financial statements that supplement the information given in the profit and loss account include:
|Schedule 3, paragraph 63||Amount of interest (or similar charges) in respect of –
|Schedule 3, paragraph 64||
|Schedule 3, paragraph 65||
|Schedule 3, paragraph 66||
Illustrated disclosure where group financial statements exclude the holding company’s Profit & Loss Account:
The Company has taken advantage of the exemption in Section 304(2) of the Companies Act 2014 not to present its individual Profit and Loss Account and related notes that form part of the approved Company financial statements.
The holding company’s entity financial statements shall be prepared either in accordance with:
- Section 291 – known as “Companies Act entity financial statements” which are financial statements complying with all the requirements of the Companies Act and applicable accounting standards (read more on: entity financial statements); or
- Section 292 – known as “IFRS entity financial statements” which comply with International financial reporting standards.