Hello
I have an interesting scenario here.
A holding company acquires a subsidiary in the year to 31 December 2007.
For medium sized group criteria, the group does not breach the limits in 2007 (so it is a small sized group) and breaches the limits in 2008, so it is above the medium sized limits, but remains small as it is the first year of 'failing' the small group test.
The subsidiary is sold in October 2009. But pro rata, the limits are breached for the year ended 31 December 2009, making it a medium sized group?
Let me clear out the group accounts issue first. December 09, Companies Act 2006 applies, however, per S399, group accounts are only required if the company is a parent at the end of the year - it isn't, as the subsidiary was sold in October 09. Therefore, no group accounts required. Phew!
The second issue is the size of the company which headed the former group. In December 09, would it be medium as it headed a medium sized group for 9/12 of the year, or would it be small as there was no group at the end of the year?
Thanks in advance.
SA
Related resources
Replies (2)
Please login or register to join the discussion.
Not a small parent company
There is nothing in s.383 CA 2006 about it not applying if there is no group at the end of the financial year. The basic definition is:
(1) A parent company qualifies as a small company in relation to a financial year only if the group headed by it qualifies as a small group.
It is undoubtedly a parent company at some point during the financial year and as it did not qualify as small in 2008, it satisfies none of the sub-clauses in s.383(3) and so, does not qualify as a small parent company in 2009. Indeed, as you must time-apportion the turnover limit under s.382(4), it is not a small parent company in 2009 itself, never mind the two year rule. You must therefore prepare the individual 2009 accounts of the parent company under full FRS, not FRSSE. As it is not a small company, the accounts must be audited.
I agree that no group accounts are required.
Well! That's what I think!
