Related Party Disclosure

Related Party Disclosure

Didn't find your answer?

FRS8 requires that where the company is controlled by another party, the company should disclose the name and relationship of that party. Am I missing something here – but aren’t all companies controlled by another party – are there ever occasions when companies control themselves? Therefore, shouldn’t we always have to include this note in the accounts?

Replies (7)

Please login or register to join the discussion.

avatar
By User deleted
27th May 2010 16:25

Yes

This is why you need to disclose in the notes to the accounts the identity of the ultimate controlling party.

SA

Thanks (0)
avatar
By Chris Smail
27th May 2010 17:48

So who do you think control Marks & Spencer?

Thanks (0)
Morph
By kevinringer
28th May 2010 08:48

So I would expect to see this note in every small company accoun

But I don't - many make no reference at all to controlling party. Are there exemptions that can be claimed to avoid having to include this note?

Thanks (0)
avatar
By User deleted
28th May 2010 09:33

No exemptions but...

There are no exemptions I am aware of provided there is one Ultimate Controlling Party that, taking into account certain connections that has "control".

However, if there are two unrelated parties that each hold 50% of the shares and are both directors with no agreement or article giving a casting vote there is no single party who has control. Therefore, no disclosure.

Also, from personal experience, with the need to actually enter the text of this note within accounts software it is sometimes overlooked. This is one of the various Institutes common accounts errors they keep alerting us to.

Thanks (0)
Morph
By kevinringer
28th May 2010 09:51

What about FRSSE or abbreviated

Any exemptions for these? I'm trying to figure out why I very rarely see this note on any small company accounts.

Thanks (0)
avatar
By User deleted
28th May 2010 10:23

Missed

As mentioned it is one that is missed out a lot.

I always put either controlled by x, or that there is not an ultimate controlling party.

ADW

Thanks (0)
Euan's picture
By Euan MacLennan
28th May 2010 10:41

Small companies usually apply the FRSSE rather than FRS8.  It is a FRSSE, not a Companies Act, requirement to disclose the (ultimate) controlling party.  Yes - the controlling party should be disclosed as a note to the full accounts prepared under the FRSSE for the shareholders and submitted to HMRC.

However, the FRSSE does not apply to abbreviated accounts and so, abbreviated accounts filed at Companies House do not need to disclose the controlling party, although additional voluntary disclosure is permitted.

I agree with the earlier answer about it being a specific, rather than automatic, text entry in accounts production software.  In IRIS, we need to untick the box which asks if you want to include the note in the abbreviated accounts as well as the full accounts.

Thanks (0)