IE
S.I. No. 262/2015 - European Union (Insurance Undertakings: Financial Statements) Regulations 2015.
Table of Provisions (106)
Statutory Text (106 Articles)
1. Without prejudice to the generality of
section 9
of the
Interpretation Act 2005
and its application to the body of these Regulations—
(a) a reference in this Schedule to a paragraph or Part is a reference to a paragraph or Part of this Schedule, unless it is indicated that a reference to some other enactment is intended; and
(b) a reference in this Schedule to a subparagraph or clause is a reference to the subparagraph or clause of the provision in which the reference occurs, unless it is indicated that a reference to some other enactment is intended.
PART II
GENERAL RULES AND FORMATS
GENERAL RULES
2. (1) Group financial statements shall comply, except for any necessary modifications to take account of differences between group financial statements and entity financial statements, with the provisions of
Schedule 1
as if the undertakings included in the consolidation (the “group”) were a single undertaking.
(2) In particular, for the purposes of
note (12)
of the balance sheet format, set out in
Part II
of
Schedule 1
, and
paragraphs 91
and
92
of
Schedule 1
(dealings with or interests in group undertakings) as it applies to group financial statements—
(a) any subsidiary undertakings of the holding undertaking not dealt with in the group financial statements shall be treated as a subsidiary undertaking of the group; and
(b) if the holding undertaking is itself a subsidiary undertaking, the group shall be treated as a subsidiary undertaking of any holding undertaking of that undertaking, and the reference to fellow subsidiary undertakings shall be read accordingly.
3. (1) The group balance sheet and group profit and loss account shall consolidate in full the information contained in the separate balance sheets and profit and loss accounts of the holding undertaking and of the subsidiary undertakings included in the consolidation, subject to the adjustments required or permitted by the following provisions of this Schedule and to such other adjustments (if any) as may be appropriate in accordance with generally accepted accounting practice.
(2) If the financial year of a subsidiary undertaking dealt with in the group financial statements differs from that of the holding undertaking, the group financial statements shall be drawn up—
(a) from the entity financial statements of the subsidiary undertaking for its financial year last ending before the end of the holding undertaking’s financial year provided that the financial year ended no more than 3 months before that of the holding undertaking; or
(b) where an undertaking’s balance sheet date precedes the group balance sheet by more than three months, but not more than six months, from interim financial statements drawn up by the subsidiary undertaking as at the end of the holding undertaking’s financial year.
AMENDMENTS TO FORMATS IN
SCHEDULE 1
Minority interest
4. (1) In the Balance Sheet Format set out in
Part II
of
Schedule 1
a further item headed "Minority interests" shall be added as
Liabilities item Aa
.
(2) The amount to be shown under the heading “Minority Interest” referred to in
subparagraph (1)
shall be the amount of share capital and reserves attributable to shares in subsidiary undertakings consolidated in the group financial statements held by or on behalf of persons other than the holding undertaking and its subsidiary undertakings.
5. (1) In applying the Profit and Loss Formats set out in
Part II
of
Schedule 1
to group financial statements a separate item under the heading “Minority Interest” shall be shown in the non-technical account as
item 10a
.
(2) The amount to be shown under the heading “Minority Interest” in accordance with
subparagraph (1)
shall be the amount of any profit or loss for the year attributable to shares in subsidiary undertakings consolidated in the group financial statements held by or on behalf of persons other than the holding undertaking and its subsidiary undertakings.
(3) In the Profit and Loss Account Format a further item headed "Minority interests" shall be added in the non-technical account as
item 13a
and under that item shall be shown the amount of any profit or loss on extraordinary activities attributable to shares in subsidiary undertakings included in the consolidation held by or on behalf of persons other than the holding undertaking and its subsidiary undertakings.
6. For the purposes of
paragraphs 4(3)
of
Schedule 1
(power to combine items) the additional items required by
paragraphs 4
and
5
shall be treated as items to which a letter is assigned.
7. Investment income and charges attributable to life assurance shall be shown in the technical account. Investment income and charges attributable to non-life business may be disclosed in the non-technical account.
Other changes
8. (1) The formats in
Schedule 1
shall have effect in relation to group financial statements with the following modifications.
(2) In the Balance Sheet Format Assets
item C.II.3
(Participating Interests) shall be replaced by two items headed "Interests in associated undertakings" and "Other participating interests".
(3) In the Profit and Loss Account Formats, the following items, that is—
(a)
item I.2(a)
of the technical account — non-life insurance,
(b)
item II.2(a)
of the technical account — life assurance business, and
(c)
item III.3(a)
of the non-technical account
shall be replaced by 2 items, “Income from interests in associated undertakings” and “Income from other participating interests”.
PART III
ACCOUNTING PRINCIPLES AND VALUATION RULES
ACCOUNTING PRINCIPLES
General
9. (1) In determining the amounts to be included in the group financial statements, the accounting principles and valuation rules contained in
Part III
of
Schedule 1
shall apply and shall be applied consistently within those group financial statements.
(2)
Subparagraph (1)
shall not apply to those liabilities items the valuation of which, by the insurance undertakings included in group financial statements, is based on the application of provisions specific to insurance undertakings nor to those assets items changes in the values of which also affect or establish policyholders’ rights.
(3) Where
subparagraph (2)
applies, that fact shall be disclosed in the notes to the group financial statements.
10. (1) Subject to
subparagraph (2)
, a holding undertaking shall apply the same methods of valuation in drawing up its group financial statements as it applies in drawing up its entity financial statements.
(2)
Subparagraph (1)
shall not apply where, in the opinion of the directors, a departure from that paragraph is necessary for the purpose of giving a true and fair view.
(3) Where there is any application of
subparagraph (2)
, the particulars of the departure and the reasons therefor shall be disclosed in the notes to the group financial statements.
11. (1) Where the assets and liabilities to be included in the group financial statements have been valued or otherwise determined by undertakings included in the consolidation according to accounting rules differing from those used in the group financial statements, the values or amounts shall be adjusted so as to accord with the rules used for the group financial statements.
(2) The adjustments referred to in this paragraph need not be made if they are not material for the purpose of giving a true and fair view.
(3) If, in the opinion of the directors of the holding undertaking, there are special reasons for departing from
subparagraph (1)
they may do so but particulars of any such departure, the reasons therefor and its effect shall be stated in the notes to the group financial statements.
12. Any differences of accounting rules as between a holding undertaking’s entity financial statements for a financial year and its group financial statements shall be disclosed in a note to the latter financial statements and the reasons for the difference given.
Preparing the consolidation
13. (1) Group financial statements shall show the assets, liabilities and financial position as at the end of the financial year and the profit or loss for the financial year of the holding undertaking and the undertakings included in the consolidation as if they were a single undertaking.
(2) In particular—
(a) debts and claims between the undertakings included in the consolidation shall be eliminated in preparing the group financial statements;
(b) income and expenditure relating to transactions between the undertakings included in the consolidation shall be eliminated in preparing the group financial statements;
(c) where profits and losses resulting from transactions between the undertakings included in the consolidation are included in the book values of assets, they shall be eliminated in preparing the group financial statements;
but
clauses (a)
to
(c)
need not be complied with where the amounts involved are
not material for the purpose of giving a true and fair view.
14. (1) The methods of consolidation shall be applied consistently from one financial year to the next.
(2) If, in the opinion of the directors of the holding undertaking, there are special reasons for departing from
subparagraph (1)
they may do so but particulars of any such departure, the reasons therefor and its effect shall be stated in the notes to the group financial statements.
Accounting for an acquisition
15. (1)
Paragraphs 16
to
19
apply where an undertaking becomes a subsidiary undertaking of the holding undertaking.
(2) That event is referred to in those provisions as an “acquisition” and references to the undertaking acquired shall be read accordingly.
16. An acquisition shall be accounted for by the acquisition method of accounting unless the conditions for accounting for it as a merger as set out in
paragraph 18
are satisfied and the merger method of accounting is adopted.
17. (1) The acquisition method of accounting is as described in
subparagraphs (2)
to
(6)
.
(2) The identifiable assets and liabilities of the undertaking acquired shall be included in the consolidated balance sheet at their fair values as at the date of acquisition.
(3) In
subparagraph (2)
“identifiable assets or liabilities” means the assets or liabilities which are capable of being disposed of or discharged separately, without disposing of a business of the undertaking.
(4) The income and expenditure of the undertaking acquired shall be brought into the group financial statements only as from the date of acquisition.
(5) There shall be calculated the difference between the acquisition cost of the interest in the shares of the acquired undertaking incurred by the undertakings included in the group financial statements, and the interest of the undertakings included in the group financial statements in the adjusted capital and reserves of the undertaking acquired.
(6) For the foregoing purpose—
“acquisition cost” means the amount of any cash consideration and the fair value of any other consideration, together with such amounts (if any) in respect of fees and other expenses of the acquisition as the holding undertaking may determine to have been incurred in relation to the acquisition;
“adjusted capital and reserves of the undertaking acquired” means its capital and reserves at the date of the acquisition after adjusting the identifiable assets and liabilities of the undertaking to fair values as at that date.
(7) The resulting amount, if positive, shall be treated as goodwill and the provisions of
Schedule 1
in relation to goodwill shall apply.
(8) The resulting amount, if negative, shall be treated as a negative consolidation difference.
18. The conditions for accounting for an acquisition as a merger are —–
(a) that at least 90
per cent
of the nominal value of the equity shares in the undertaking acquired is held by or on behalf of the undertakings consolidated in the group financial statements,
(b) that the proportion referred to in
clause (a)
was attained pursuant to the arrangement providing for the issue of equity shares by the undertakings consolidated in the group financial statements,
(c) that the fair value of any consideration other than the issue of equity shares given pursuant to the arrangement by the undertakings consolidated in the group financial statements did not exceed 10
per cent
of the nominal value of the equity shares issued.
19. (1) The merger method of accounting is as set out in
subparagraphs (2)
to
(6)
.
(2) The assets and liabilities of the undertaking acquired shall be brought into the group financial statements at the amount at which they stand in the acquired undertaking’s financial statements, subject to any adjustment authorised or required by this Part.
(3) The income and expenditure of the acquired undertaking shall be included in the group financial statements for the entire financial year, including the period before the acquisition.
(4) The group financial statements shall show corresponding amounts relating to the previous financial year as if the undertaking had been included in the consolidation throughout that year.
(5) There shall be set off against the aggregate of—
(a) the appropriate amount in respect of shares issued by the undertakings consolidated in the group financial statements as part of the arrangement referred to in
paragraph 18(b)
in consideration for the acquisition of shares in the acquired undertaking; and
(b) the fair value of any other consideration for the acquisition of shares in the acquired undertaking, determined as at the date when those shares were acquired;
the nominal value of the issued share capital of the acquired undertaking held by the undertakings consolidated in the group financial statements.
(6) The resulting amount shall be shown as an adjustment to the consolidated reserves.
20. (1) Where a group is acquired,
paragraphs 15
to
19
apply with the following adaptations.
(2) References to shares of the acquired undertaking shall be read as references to shares of the holding undertaking of the group acquired.
(3) Other references to the acquired undertaking shall be read as references to the group acquired; and references to the assets and liabilities, income and expenditure and capital and reserves of the acquired undertaking shall be read as references to the assets and liabilities, income and expenditure and capital and reserves of the group after making the set offs and other adjustments required by this Part in the case of group financial statements.
Changes in the composition of the group
21. If the composition of the undertakings consolidated in the group financial statements has changed significantly in the course of a financial year, the group financial statements must include information which makes the comparison of successive sets of group financial statements meaningful.
Differences in tax treatment
22. Account shall be taken in the group financial statements of any difference arising on consolidation between the tax chargeable for the financial year and for preceding financial years and the amount of tax paid or payable in respect of those years, provided that it is probable that an actual charge to tax will arise within the foreseeable future for one of the undertakings dealt with in the group financial statements.
ACCOUNTING FOR JOINT VENTURES AND ASSOCIATES IN GROUP FINANCIAL STATEMENTS
Joint ventures
23. (1) Where a holding undertaking or one of its subsidiary undertakings consolidated in the group financial statements manages another undertaking jointly with one or more undertakings not consolidated in the group financial statements, that other undertaking (the “joint venture”) may, if it is not—
(a) a body corporate; or
(b) a subsidiary undertaking of the holding undertaking;
be proportionally consolidated in the group financial statements in proportion to the rights in its capital held by the holding undertaking or the subsidiary undertakings consolidated in the group financial statements, as the case may be.
(2) The provisions of this Schedule relating to the preparation of consolidated financial statements shall apply, with any necessary modifications, to the inclusion of joint ventures in the consolidated financial statements by proportional consolidation in accordance with
subparagraph (1)
.
Associated undertakings
24. (1) In paragraph 25 “associated undertaking” means an undertaking in which an undertaking consolidated in the group financial statements has a participating interest and over whose operating and financial policy it exercises a significant influence and which is not—
(a) a subsidiary undertaking of the holding undertaking; or
(b) a joint venture proportionally consolidated in accordance with
paragraph 23
.
(2) Where an undertaking holds 20
per cent
or more of the voting rights in another undertaking, it shall be presumed to exercise such an influence over it unless the contrary is shown.
(3) The voting rights in an undertaking means the rights conferred on shareholders in respect of their shares or, in the case of an undertaking not having a share capital, on members, to vote at general meetings of the undertaking on all or substantially all matters.
(4) The provisions of
section 7(5)
and
(6)
of the Principal Act with respect to determining whether shares are held in a body corporate and with respect to reckoning the amount of voting rights held apply, with any necessary modifications, in determining for the purpose of this paragraph whether an undertaking holds 20
per cent
or more of the voting rights in another undertaking.
25. (1) The interest of an undertaking consolidated in the group financial statements in an associated undertaking, and the amount of profit or loss attributable to such an interest, shall be shown in the group financial statements by way of the equity method of accounting including dealing with any goodwill arising in accordance with
paragraphs 23
to
25
and
paragraph 27
of
Schedule 1
.
(2) Where the associated undertaking is itself a holding undertaking, the net assets and profits or losses to be taken into account are those of the holding and its subsidiary undertakings (after making any consolidation adjustments).
(3) The equity method of accounting need not be applied if the amounts in question are not material for the purpose of giving a true and fair view.
Participating interest
26. (1) In
paragraph 24
and this paragraph “participating interest” means an interest held by one undertaking in the equity shares of another undertaking which it holds on a long term basis for the purpose of securing a contribution to that undertaking’s own activities by the exercise of control or influence arising from or related to that interest.
(2) The reference in
subparagraph (1)
to an interest in equity shares includes—
(a) an interest which is convertible into an interest in equity shares; and
(b) an option to acquire equity shares or any such interest,
and an interest or option falls within
clause (a)
or
(b)
notwithstanding that the equity shares to which it relates are, until the conversion or the exercise of the option, unissued.
(3) The percentage of interest in equity shares held in an undertaking with share capital shall be the percentage that the nominal value of the shares held represents of the nominal value of the allotted share capital of that undertaking.
(4) Where an undertaking holds an interest in equity shares and such an interest represents 20
per cent
or more of all such interests in the other undertaking it shall be presumed to hold that interest on the basis and for the purpose mentioned in
subparagraph (1)
unless the contrary is shown.
(5) For the purpose of this paragraph an interest held on behalf of an undertaking shall be treated as held by it.
(6) For the purpose of this paragraph as it applies in relation to "participating interest" in
section 7
of the Principal Act—
(a) there shall be attributed to an undertaking any interests held by any of its subsidiary undertakings, and
(b) the references in
subparagraph (1)
of this paragraph to the purpose and activities of an undertaking include the purpose and activities of any of its subsidiary undertakings and of the group as a whole.
(7) In the balance sheet and profit and loss formats set out in
Part II
of
Schedule 1
, “participating interest” does not include an interest in a group undertaking.
PART IV
INFORMATION REQUIRED BY WAY OF NOTES TO GROUP FINANCIAL STATEMENTS
27. Without prejudice to
paragraph 2
, the notes to the group financial statements shall, in addition to providing the information required by
Schedule 1
, also state the information required by
paragraphs 28
to
33
.
28. Where sums originally denominated in currencies, other than the currency in which the group financial statements are presented, have been brought into account under any items shown in the balance sheet or profit and loss account, the basis on which those sums have been translated into the currency in which the group financial statements are presented shall be stated.
29. In respect of the aggregate of the amounts shown in the group balance sheet under the heading “Creditors” there shall be stated the information required by
paragraph 77
of
Schedule 1
as if references in that paragraph to an undertaking were to the undertaking and its subsidiary undertakings taken as a whole.
30. In relation to each joint venture proportionately consolidated, there shall be stated the nature of the joint management arrangement and the factors on which the joint management of the undertaking is based.
31. (1) In relation to the resulting amounts referred to in
paragraphs 17(7)
,
(8)
and
19(6)
, there shall be stated in the notes to the group financial statements the methods used in calculating those amounts and the reasons for any significant difference between such amounts for the financial year to which the group financial statements refer and those for the preceding financial year.
(2) In relation to acquisitions taking place in the financial year, there shall be stated in the notes to the group financial statements—
(a) the name and registered office of the acquired undertaking, or where a group was acquired, the name and registered office of the holding undertaking of that group; and
(b) whether the acquisition has been accounted for by the acquisition method or the merger method of accounting.
32. The information set out in
section 314
of the Principal Act shall also be given in respect of each undertaking which has been excluded from the group accounts by virtue of the application of
section 303
of the Principal Act.
33. (1)
Paragraph 89
(related party transactions) of
Schedule 1
shall, in the case of group financial statements, apply to all transactions entered into by the holding undertaking, or any subsidiary undertaking included in the consolidation, with related parties, being transactions of the kind referred to in that paragraph but not being intra-group transactions.
(2) A word or expression that is used in
subparagraph (1)
has the same meaning as it has in Directive 2006/46/EC.
Given under my Official Seal,
17 June 2015.
MICHAEL NOONAN,
Minister for Finance.
EXPLANATORY NOTE
(This note is not part of the Instrument and does not purport to be a legal interpretation)
These Regulations revoke the European Communities (Insurance Undertakings: Accounts) Regulations, 1996 (
S.I. No. 23 of 1996
) and may be cited as the European Communities (Insurance Undertakings: Financial Statements) Regulations 2015.
These Regulations provide that a similar structure to Part 6 of the
Companies Act 2014
will be adopted in respect of accounting requirements for insurance undertakings.
These Regulations require insurance undertakings to prepare and to publish annually accounts (balance sheet, profit and loss account and notes), in accordance with the provisions of these Regulations. They also require (with provision for exceptions) insurance undertakings which have subsidiary undertakings or non-insurance holding companies, the most important of whose subsidiaries are insurance undertakings, to prepare and to publish group accounts in accordance with the provisions of these Regulations.
The Regulations contain provisions governing the preparation of accounts, including group accounts, the content of those accounts, their format and the valuation of items to be included. They specify information to be included in the notes to the accounts.
1 OJ No. L 374, 31.12.1991, p. 7
______________2 OJ No. L 320, 29.11.2008, p. 1
______________3 OJ No. L 224, 16.08.2006, p. 1
_____________4 OJ L 335, 17.12.2009, p. 1
34. (1) Subject to
subparagraph (2)
, assets which fall to be included under Assets item F.I (tangible assets and stocks) in the balance sheet format (set out in
Section B of Part II
of this Schedule) may be included at a fixed quantity and value.
(2)
Subparagraph (1)
applies to assets of a kind which are constantly being replaced, where—
(a) their overall value is not material to assessing the undertaking’s state of affairs; and
(b) their quantity, value and composition are not subject to material variation.
SUBSTITUTION OF ORIGINAL STATED AMOUNT WHERE PRICE OR COST UNKNOWN
35. Where there is no record of the purchase price of any asset of an undertaking or of any price, expense or costs relevant for determining its cost in accordance with paragraph 32 or any such record cannot be obtained without unreasonable expense or delay, its cost shall be taken for the purposes of
paragraphs 23
to
30
to be the value ascribed to it in the earliest available record of its value made on or after its acquisition or construction by the undertaking.
SECTION C
ALTERNATIVE ACCOUNTING RULES
Preliminary
36. (1) The rules set out in
Section B
are referred to subsequently in this Schedule as the historical cost accounting rules.
(2) Those rules, with the omission of
paragraphs 22, 27
and
32 to 35
, are referred to subsequently in this Part as the depreciation rules; and references subsequently in this Schedule to the historical cost accounting rules do not include the depreciation rules as they apply by virtue of
paragraph 43
.
37. Subject to
paragraphs 43
to
45
, the amounts to be included in respect of assets of any description mentioned in
paragraph 38
may be determined on any basis so mentioned.
Alternative accounting rules
38. (1) Investments falling to be included under
Assets item C
(investments) may be included at their current value calculated in accordance with
paragraphs 41
and
42
.
(2) Investments falling to be included under
Assets item D
(unit-linked investments) shall be shown at their current value.
39. (1) Intangible assets, other than goodwill, and assets falling to be included under
Assets item F.II
(cash at bank and in hand) and
F.III
(other) may be included at their current cost.
(2) Assets falling to be included under
Assets item F.I
(tangible assets and stocks) in the balance sheet format (set out in
Section B
of
Part II
of this Schedule) may be included at a market value determined as at the date of their last valuation or at their current cost.
40. The same valuation method shall be applied to all investments included in any item denoted by an Arabic number or shown as assets under
Assets item C.I.
Valuation of investments
41. (1) Subject to
subparagraph (5)
in the case of investments other than land and buildings, current value shall mean market value determined in accordance with this paragraph.
(2) Where investments are officially listed on an official stock exchange, market value shall mean the value on the balance sheet date or, when the balance sheet date is not a stock exchange trading day, on the last stock exchange trading day before that date.
(3) Where a market exists for unlisted investments, market value shall mean the average price at which such investments were traded on the balance sheet date or, when the balance sheet date is not a trading day, on the last trading day before that date.
(4) Where on the date on which the financial statements are drawn up listed or unlisted investments have been sold or are to be sold within the short term, the market value shall be reduced by the actual or estimated realisation costs.
(5) Except where the equity method is applied all investments other than those referred to in
subparagraphs (2)
and
(3)
shall be valued on a basis which has prudent regard to the likely realisable value.
(6) In all cases the method of valuation shall be precisely described and the reason for adopting it disclosed in the notes to the financial statements.
42. (1) In the case of land and buildings, current value shall mean the market value on the date of valuation, where relevant, reduced as provided in
subparagraphs (4)
and
(5)
.
(2) Market value shall mean the price at which land and buildings could be sold under private contract between a willing seller and an arm’s length buyer on the date of valuation, it being assumed that the property is publicly exposed to the market, that market conditions permit orderly disposal and that a normal period, having regard to the nature of the property, is available for the negotiation of the sale.
(3) The market value shall be determined through the separate valuation of each land and buildings item, carried out at least every five years in accordance with generally accepted methods of valuation.
(4) Where the value of any land and buildings item has diminished since the preceding valuation under
subparagraph (3)
, an appropriate value adjustment shall be made and the lower value arrived at shall not be increased in subsequent balance sheets unless such increase results from a new determination of market value arrived at in accordance with
subparagraphs (2)
and
(3)
.
(5) Where on the date on which the financial statements are drawn up and buildings have been sold or are to be sold within the short term, the value arrived at in accordance with
subparagraphs (2)
and
(4)
shall be reduced by the actual or estimated realisation costs.
(6) Where it is impossible to determine the market value of a land and buildings item, the value arrived at on the basis of the principle of purchase price or production cost shall be deemed to be its current value.
(7) The method by which the current value of land and buildings has been arrived at and their breakdown by financial year of valuation shall be disclosed in the notes to the financial statements.
Application of depreciation rules
43. (1) Where the value of any asset of an undertaking is determined on any basis mentioned in
paragraph 38
(in the case of assets falling to be included under
assets item C.1
) or
paragraph 39
, that value shall be, or (as the case may require) be the starting point for determining, the amount to be included in respect of that asset in the undertaking’s financial statements, instead of its cost or any value previously so determined for that asset; and the depreciation rules shall apply accordingly in relation to any such asset with the substitution for any reference to its cost of a reference to the value most recently determined for that asset on any basis mentioned in
paragraphs 38
or
39
(as the case may be).
(2) The amount of any provision for depreciation required in the case of any fixed asset by
paragraph 24
or
25
as it applies by virtue of
subparagraph (1)
is referred to subsequently in this paragraph as the “adjusted amount”; and the amount of any provision which would be required by that paragraph in the case of that asset according to the historical cost accounting rules is referred to as the “historical cost amount”.
(3) Where
subparagraph (1)
applies in the case of any fixed asset, the amount of any provision for depreciation in respect of that asset included in any item shown in the profit and loss account in respect of amounts written off assets of the description in question may be the historical cost amount instead of the adjusted amount, provided that, if the amount of the provision for depreciation is the historical cost amount, the amount of any difference between the two shall be shown separately in the profit and loss account or in a note to the financial statements.
Additional information in case of departure from historical cost accounting rules
44. (1) This paragraph applies where the amounts to be included in respect of assets covered by any items shown in an undertaking’s financial statements have been determined on any basis mentioned in
paragraphs 38
or
39
.
(2) The items affected and the basis of valuation adopted in determining the amounts of the assets in question in the case of each such item shall be disclosed in a note to the financial statements.
(3) The purchase price of investments valued in accordance with
paragraph 38
shall be disclosed in the notes to the financial statements.
(4) In the case of each balance sheet item valued in accordance with
paragraph 39
either—
(a) the comparable amounts determined according to the historical cost accounting rules; or
(b) the differences between those amounts and the corresponding amounts actually shown in the balance sheet in respect of that item,
shall be shown separately in the balance sheet or in a note to the financial statements.
(5) In
subparagraph (4)
, references in relation to any item to the comparable amounts determined as there mentioned are references to—
(a) the aggregate amount which would be required to be shown in respect of that item if the amounts to be included in respect of all the assets covered by that item were determined according to the historical cost accounting rules; and
(b) the aggregate amount of the cumulative provisions for depreciation or diminution in value which would be permitted or required in determining those amounts according to those rules.
Revaluation Reserve
45. (1) With respect to any determination of the value of an asset of an undertaking on any basis mentioned in
paragraph 38
, the amount of any profit or loss arising from that determination (after allowing, where appropriate, for any provisions for depreciation or diminution in value made otherwise than by reference to the value so determined and any adjustments of any such provisions made in the light of that determination) shall be credited or (as the case may be) debited to a separate reserve (referred to in this paragraph as the “revaluation reserve”), except in so far as it has already been recognised in the life assurance technical account or the non-technical account in accordance with
note (10)
to the profit and loss account.
(2) The amount of the revaluation reserve shall be shown in the undertaking’s balance sheet under Liabilities
item A.III
in the balance sheet format (set out in
Section B
of
Part II
of this Schedule).
(3) An amount may be transferred—
(a) from the revaluation reserve—
(i) to the profit and loss account, if the amount was previously charged to that account, or it represents realised profit; or
(ii) on capitalisation;
(b) to or from the revaluation reserve in respect of the taxation relating to any profit or loss credited or debited to the reserve;
and the revaluation reserve shall be reduced to the extent that the amounts transferred to it are no longer necessary for the purpose of the valuation methods used.
(4) In
subparagraph (3)(a)(ii)
“capitalisation”, in relation to an amount standing to the credit of the revaluation reserve, means applying it in wholly or partly paid up unissued shares in the undertaking to be allotted to members of the undertaking as fully or partly paid shares.
(5) The revaluation reserve shall not be reduced except as mentioned in this paragraph.
(6) The treatment for taxation purposes of amounts credited or debited to the revaluation reserve shall be disclosed in a note to the financial statements.
SECTION D
FAIR VALUE ACCOUNTING RULES
Inclusion of financial instruments at fair value
46. (1) Subject to
subparagraphs (2)
to
(4)
and
paragraph 47
, financial instruments, including derivative financial instruments, may be accounted for at fair value.
(2) Subject to
paragraph 49
,
subparagraph (1)
does not apply to financial instruments which constitute liabilities unless—
(a) they are held as part of a trading portfolio; or
(b) they are derivative financial instruments.
(3)
Subparagraph (1)
does not apply to—
(a) financial instruments (other than derivative financial instruments) held to maturity;
(b) loans and receivables originated by the undertaking and not held for trading purposes;
(c) interests in subsidiary undertakings, associated undertakings and joint ventures;
(d) equity instruments issued by the undertaking;
(e) contracts for contingent consideration in a business combination; and
(f) other financial instruments with such special characteristics that the instruments, according to generally accepted accounting principles or practice, should be accounted for differently from other financial instruments.
(4) If the fair value of a financial instrument cannot be determined reliably by any of the methods described in
paragraph 48
,
subparagraph (1)
does not apply to that financial instrument and it shall be measured using the accounting rules set out in
Section B
or
C
.
(5) In this paragraph—
“associated undertaking” has the meaning given to it by
paragraph 24
of
Schedule 2
;
“joint venture” has the meaning given to it by
paragraph 23
of
Schedule 2
.
47. (1) Financial instruments which constitute liabilities, other than such instruments referred to in
subparagraphs (2)(a)
and
(b)
of
paragraph 46
, may be accounted for by an undertaking at fair value if—
(a) they are accounted for in accordance with international accounting standards as adopted by the Commission Regulation on or before 5 September 2006; and
(b) the associated disclosure requirements, provided for in international financial reporting standards, are made.
(2) Financial instruments referred to in
paragraph 46(3)
may be accounted for by an undertaking at fair value if—
(a) they are accounted for in accordance with international accounting standards as adopted by the Commission Regulation, on or before 5 September 2006; and
(b) the associated disclosure requirements, provided for in international financial reporting standards, are made.
(3) In this paragraph “Commission Regulation” means Commission Regulation (EC) No. 1126/2008 of 3 November 2008
2
.
Methods for determining fair value
48. (1) The fair value of a financial instrument is its value determined in accordance with this paragraph.
(2) If a reliable market can readily be identified for the financial instrument, its fair value is to be determined by reference to its market value.
(3) If a reliable market cannot readily be identified for the financial instrument but can be identified for its components or for a similar instrument, its fair value is to be determined by reference to the market value of its components or of the similar instrument.
(4) If neither
subparagraph (2)
nor
(3)
applies, the fair value of the financial instrument is to be a value resulting from generally accepted valuation models and techniques.
(5) Any valuation models and techniques used for the purposes of
subparagraph (4)
shall ensure a reasonable approximation of the market value.
Inclusion of hedged items at fair value
49. An undertaking may include any assets and liabilities that qualify as hedged items under a fair value hedge accounting system, or identified portions of such assets and liabilities, at the amount required under that system.
Other assets that may be included at fair value
50. (1) This paragraph applies to—
(a) investment property; and
(b) living animals and plants;
that, under relevant international financial reporting standards, may be included in financial statements at fair value.
(2) Such investment property and such living animals and plants may be included at fair value, provided that all such investment property or, as the case may be, all such living animals and plants are so included where their fair value can reliably be determined.
(3) In this paragraph, “fair value” means fair value determined in accordance with relevant international financial reporting standards.
Accounting for changes in fair value of financial instruments
51. (1) This paragraph applies where a financial instrument is valued at fair value in accordance with
paragraph 46
or
49
or where an asset is valued in accordance with paragraph 50.
(2) Notwithstanding
paragraph 17
, but subject to
subparagraphs (3)
and
(4)
, a change in the fair value of the financial instrument or of the investment property or living animal or plant shall be included in the profit and loss account.
(3) Where—
(a) the financial instrument accounted for is a hedging instrument under a system of hedge accounting that allows some or all of the change in value not to be shown in the profit and loss account; or
(b) the change in value relates to an exchange difference arising on a monetary item that forms part of an undertaking’s net investment in a foreign entity;
the amount of the change in value shall be credited or (as the case may be) debited to a separate reserve to be known as the “fair value reserve”.
(4) Where the instrument accounted for—
(a) is an available for sale financial asset; and
(b) is not a derivative;
the change in value may be credited or (as the case may be) debited to the fair value reserve.
The fair value reserve
52. (1) An amount shall be transferred—
(a) from the fair value reserve to the profit and loss account if the related asset is impaired, transferred or disposed of; or
(b) from the fair value reserve in respect of tax relating to any amount transferred under
clause (a)
.
(2) The fair value reserve shall be adjusted when amounts therein are no longer necessary for the purposes of
paragraph 51(3)
or
(4)
.
(3) The fair value reserve shall not be reduced except as provided for in this paragraph.
(4) The treatment for taxation purposes of amounts credited or debited to the fair value reserve shall be disclosed in a note to the financial statements.
PART IV
General Rules
53. (1) This paragraph applies to debt securities and other fixed income securities shown as assets under
items C.II
and
C.III
of the balance sheet format (set out in
Section B
of
Part II
of this Schedule) which have not been valued at market value.
(2) The amount included in the balance sheet in respect of these assets shall be their purchase price.
(3) Where the purchase price of these assets exceeds the amount repayable at maturity, the amount of the difference shall be charged to the profit and loss account or reduced each financial year on a systematic basis, in accordance with best accounting practice, so that it is completely written off when the securities are repaid. That difference shall be shown separately in the balance sheet or in the notes to the financial statements.
(4) Where the purchase price of these assets is less than the amount repayable at maturity, the amount of the difference may be released to income in instalments over the period remaining until repayment. That difference shall be shown separately in the balance sheet or in the notes to the financial statements.
Technical provisions
54. The amount of technical provisions shall at all times be sufficient to cover any liabilities arising out of insurance contracts as far as can reasonably be foreseen.
Provision for unearned premiums
55. (1) Subject to
subparagraph (2)
, the provision for unearned premiums shall be computed separately for each insurance contract.
(2) Notwithstanding
subparagraph (1)
statistical methods, in particular proportional and flat rate methods, may be used where they may be expected to give approximately the same results as would be obtained if individual calculations were made under
subparagraph (1)
.
(3) In classes of insurance where the pattern of risk varies over the life of a contract, this shall be taken into account in the calculation methods.
Provision for unexpired risks
56. (1) The provision for unexpired risks shall be computed on the basis of claims and administrative expenses likely to arise after the end of the financial year from contracts concluded before that date, in so far as their estimated value exceeds the provision for unearned premiums and any premiums receivable under those contracts.
(2) In this paragraph, "unexpired risks" has the same meaning as it has in
note (23)
to the balance sheet format which is set out in
Section B
of
Part II
of this
Schedule
.
Life assurance
57. (1) Subject to
subparagraph (2)
, the life assurance provision shall be computed separately for each life assurance contract.
(2) Notwithstanding
subparagraph (1)
, statistical or mathematical methods may be used where they may be expected to give approximately the same results as would be obtained if individual calculations were made under
subparagraph (1)
.
(3) A summary of the principal assumptions in making the provision under
subparagraph (1)
or
(2)
shall be given in the notes to the financial statements.
(4) The computation shall be made on the basis of recognised actuarial methods annually by a Fellow Member of the Society of Actuaries in Ireland, with due regard to the actuarial principles laid down in the Insurance and Reinsurance Directive.
PROVISIONS FOR CLAIMS OUTSTANDING
Non-life insurance
58. (1) Subject to
subparagraph (2)
, a provision for claims outstanding shall be computed separately for each case on the basis of the costs still expected to arise.
(2) Notwithstanding
subparagraph (1)
, statistical methods may be used if they result in an adequate provision for claims outstanding having regard to the nature of the risks.
(3) A provision for claims outstanding shall also allow for claims incurred but not reported by the balance sheet date, the amount of the allowance being determined having regard to past experience as to the number and magnitude of claims reported after previous balance sheet dates.
(4) All claims settlement costs shall be included in the calculation of the provision for claims outstanding, irrespective of their origin.
(5) Recoverable amounts arising out of subrogation or salvage shall be estimated on a prudent basis and either deducted from the provision for claims outstanding (in which case if the amounts are material they shall be shown in the notes to the financial statements) or shown as assets.
(6) Where benefits resulting from a claim are required to be paid in the form of annuity, the amounts to be set aside for that purpose shall be calculated by recognised actuarial methods.
(7) In
subparagraph (5)
—
"salvage" means the acquisition of the legal ownership of insured property
"subrogation" means the acquisition of the rights of policy holders with respect to third parties.
59. (1) There shall be no implicit discounting or deductions (including by way of financial reinsurance), whether resulting from the placing of a present value on a provision for an outstanding claim which is expected to be settled later at a higher figure or otherwise effected.
(2) The Bank may, on application by the undertaking concerned, permit explicit discounting or deductions (including by way of financial reinsurance) to take account of investment income subject to compliance with the following conditions and any other conditions which the Bank may from time to time consider necessary
(a) the expected date for the settlement of claims shall be on average at least four years after the accounting date;
(b) the discounting or deduction shall be effected on a recognised prudential basis: any change in that basis shall be notified, in advance, to the Bank;
(c) when calculating the total cost of settling claims, an undertaking shall take account of all factors that could cause increases in that cost;
(d) an undertaking shall have adequate data at its disposal to construct a reliable model of the rate of claims settlements;
(e) the rate of interest used for the calculation of present value shall not exceed a prudent estimate of the investment income from assets invested as a provision for claims during the period necessary for the payment of such claims and that rate shall not exceed either of the following
(i) a rate derived from the investment income from such assets over the preceding five years
(ii) a rate derived from the investment income from such assets during the year preceding the balance sheet date.
(3) When discounting or effecting deductions, an undertaking shall, in the notes to its financial statements, disclose the total amount of provisions before discounting or deduction, the categories of claims which are discounted or from which deductions have been made and, for each category of claims, the methods used, in particular the rates used for the estimates referred to in the
clauses (c)
and
(e)
of
subparagraph (2)
, and the criteria adopted for estimating the period that will elapse before the claims are settled.
Life assurance business
60. The amount of the provision for claims shall—
(a) be equal to the sums due to beneficiaries, plus the costs of settling claims,
(b) include the provision for claims incurred but not reported, and
(c) be disclosed under
Liabilities item C.2
.
Non-life insurance business
61. Any equalisation provision established under article 14(8) of the European Communities (Non-Life Insurance) Regulations 1976 (
S.I. No. 115 of 1976
), shall be valued in accordance with the provisions of those Regulations.
Accounting on a non-annual basis
62. (1) Where, because of the nature of the class or type of insurance in question, information relating to premiums receivable or claims payable or to both in respect of the underwriting year is, when the annual financial statements are drawn up, insufficient for accurate estimates to be made, then either of the methods set out in the Table to this paragraph may be adopted and applied.
(2) The method adopted shall be disclosed in the notes to the financial statements together with the reasons for adopting it.
(3) The method adopted shall be applied systematically in successive years unless circumstances justify a change and where there is a change in the method applied, the effect on the assets, liabilities, financial position and profit or loss shall be disclosed in the notes to the financial statements.
(4) In this paragraph and the Table hereto "underwriting year" means the financial year in which the insurance contracts in the class or type of insurance in question commenced.
Table
Method 1
(a) The excess of the premiums written over the claims and expenses paid in respect of contracts commencing in the underwriting year shall form a technical provision included in the technical provision for claims outstanding shown in the balance sheet under
Liabilities item C.3
.
(b) The provision may also be computed on the basis of a given percentage of the premiums written where such a method is appropriate for the type of risk insured.
(c) If necessary, the amount of this technical provision shall be increased to make it sufficient to meet present and future obligations.
(d) The technical provision constituted under this method shall be replaced by a provision for claims outstanding estimated in accordance with
paragraphs 58
to
60
as soon as sufficient information has been gathered and not later than the end of the third year following the underwriting year.
(e) The length of time that elapses before a provision for claims outstanding is constituted in accordance with
paragraph (d)
of this method shall be disclosed in the notes to the financial statements.
Method 2
(a) The figures shown in the technical account or in certain items within it shall relate to a year which wholly or partly precedes the financial year but by no more than 12 months.
(b) The amounts of the technical provisions shown in the financial statements shall, if necessary, be increased to make them sufficient to meet present and future obligations.
(c) The length of time by which the earlier year to which the figures relate precedes the financial year and the magnitude of the transactions concerned shall be disclosed in the notes to the financial statements.
PART V
INFORMATION REQUIRED BY WAY OF NOTES TO FINANCIAL STATEMENTS
Preliminary
63. Any information required in the case of any undertaking by the following provisions of this Part shall (if not given in the undertaking’s financial statements) be given by way of a note to those financial statements.
Information supplementing the balance sheet
64.
Paragraphs 65
to
80
require information which either supplements the information given with respect to any particular items shown in the balance sheet or is otherwise relevant to assessing the undertaking’s financial position in the light of the information so given.
Debentures
65. (1) If the undertaking has issued any debentures during the financial year to which the financial statements relate, the following information shall be given
(a) the reason for making the issue,
(b) the classes of debentures issued, and
(c) as respects each class of debentures, the amount issued and the consideration received by the undertaking for the issue.
(2) Particulars of any redeemed debentures which the undertaking has power to reissue shall also be given.
(3) Where any of the undertakings debentures are held by a nominee of or trustee for the undertaking, the nominal amount of the debentures and the amount at which they are stated in the accounting records kept by the undertaking in accordance with
section 281
of the Principal Act shall be stated.
Assets
66. (1) In respect of any assets of the undertaking included in
Assets item B
(intangible assets),
C.I
(land and buildings) and
C.II
(investments in group undertakings and participating interests) in the undertaking’s balance sheet, for each of the items the following information shall be given separately—
(a) the appropriate amounts in respect of that item as at the date of the beginning of the financial year and as at the financial year end date respectively;
(b) the effect on any amount included in
Assets item B
in respect of that item of—
(i) any revision of the amount in respect of any assets included under that item made during that year on any basis mentioned in
paragraph 39
;
(ii) acquisitions during that year of any assets;
(iii) disposals during that year of any assets; and
(iv) any transfers of assets of the undertaking to and from that item during that year.
(2) The reference in
subparagraph (1)(a)
to the appropriate amounts in respect of any assets (included in an assets item) as at any date there mentioned is a reference to amounts representing the aggregate amounts determined, as at that date, in respect of assets falling to be included under that item either—
(a) on the basis of cost (determined in accordance with
paragraphs 32
and
33
); or
(b) on any basis mentioned in
paragraph 38
or
39
;
(leaving out of account in either case any provisions for depreciation or diminution in value).
(3) In addition, in respect of any assets of the undertaking included in any assets item in the undertaking’s balance sheet, there shall be stated (by reference to each such item)—
(a) the cumulative amount of provisions for depreciation or diminution in value of assets included under that item as at each date mentioned in
subparagraph (1)(a)
;
(b) the amount of any such provisions made in respect of the financial year concerned;
(c) the amount of any adjustments made in respect of any such provisions during that year in consequence of the disposal of any assets; and
(d) the amount of any other adjustments made in respect of any such provisions during that year.
67. Where any assets of the undertaking (other than listed investments) are included under any item shown in the undertaking’s balance sheet at an amount determined on any basis mentioned in
paragraph 38
or
39
, the following information shall be given—
(a) the years (so far as they are known to the directors) in which the assets were severally valued and the several values; and
(b) in the case of assets that have been valued during the financial year, the names of the persons who valued them or particulars of their qualifications for doing so and (in either case) the bases of valuation used by them.
68. In relation to any amount which is included under
Assets item C.I
(land and buildings) the following shall be stated
(a) how much of that amount is ascribable to land of freehold tenure and how much to land of leasehold tenure; and
(b) how much of the amount ascribable to land of leasehold tenure is ascribable to land held on long lease and how much to land held on short lease.
Investments
69. (1) In respect of the amount of each item which is shown in the undertaking’s balance sheet under
Assets item C
(investments) there shall be stated how much of that amount is ascribable to listed investments.
(2) Where the amount of any listed investments is stated for any item in accordance with
subparagraph (1)
, the following amounts shall also be stated—
(a) the aggregate market value of those investments where it differs from the amount so stated;
(b) how much of any amount so ascribable is ascribable to investments in respect of which there has been granted a listing on a recognised stock exchange and how much to other listed investments; and
(c) both the market value and stock exchange value of any investments of which the former value is, for the purposes of the financial statements, taken as being higher than the latter.
Information about fair valuation of assets and liabilities
70. (1) This paragraph applies where financial instruments have been included at fair value by virtue of
paragraph 46
or
49
.
(2) There shall be stated—
(a) the significant assumptions underlying the valuation models and techniques where fair values have been determined in accordance with
paragraph 48(5)
;
(b) for each category of financial instrument the fair value of the financial instruments in that category and the amounts—
(i) included in the profit and loss account; and
(ii) credited or debited to the fair value reserve;
in respect of instruments in that category;
(c) for each class of derivative financial instrument, the extent and nature of the instruments including significant terms and conditions that may affect the amount, timing and certainty of future cash flows; and
(d) a table showing movements in the fair value reserve during the financial year.
71. Where the undertaking has derivative financial instruments that it has not accounted for at fair value, there shall be stated for each class of such derivatives—
(a) the fair value of the derivatives in that class, if such a value can be determined in accordance with
paragraph 48
; and
(b) the extent and nature of the derivatives.
72. Where—
(a) an undertaking has financial assets which could be included at fair value by virtue of
paragraph 46
;
(b) those assets are included in the undertaking’s financial statements at an amount in excess of their fair value; and
(c) the undertaking has not made provision for the diminution in value of those assets in accordance with
paragraph 25(1)
;
there shall be stated—
(i) the amount at which either the individual assets or appropriate groupings of those assets is stated in the undertaking’s financial statements;
(ii) the fair value of those assets or groupings; and
(iii) the reasons for not making a provision for diminution in value of those assets, including the nature of the evidence that provides the basis for the belief that the amount at which they are stated in the financial statements will be recovered.
Information where investment property and living animals and plants included at fair value
73. (1) This paragraph applies where the amounts to be included in an undertaking’s financial statements in respect of investment property or living animals and plants have been determined in accordance with
paragraph 50
.
(2) The balance sheet items affected and the basis of valuation adopted in determining the amounts of the assets concerned in the case of each such item shall be disclosed in a note to the financial statements.
(3) In the case of investment property, for each balance sheet item affected there shall be shown, either separately in the balance sheet or in a note to the financial statements—
(a) the comparable amounts determined according to the historical cost accounting rules; or
(b) the differences between those amounts and the corresponding amounts actually shown in the balance sheet in respect of that item.
(4) In
subparagraph (3)
, references in relation to any item to the comparable amounts determined in accordance with that subparagraph are references to—
(a) the aggregate amount which would be required to be shown in respect of that item if the amounts to be included in respect of all the assets covered by that item were determined according to the historical cost accounting rules; and
(b) the aggregate amount of the cumulative provisions for depreciation or diminution in value which would be permitted or required in determining those amounts according to those rules.
Dividends, reserves and provisions for liabilities
74. (1) The profit and loss account reserve of an undertaking for a financial year shall show—
(a) the aggregate amount of dividends paid in the financial year (other than dividends for which a liability existed at the immediately preceding financial year end date);
(b) the aggregate amount of dividends the undertaking is liable to pay at the financial year end date (other than dividends for which a liability existed at the immediately preceding financial year end date);
(c) separately, any transfer between the profit and loss account reserve and other reserves;
(d) any other increase or reduction in the balance on the profit and loss account reserve since the immediately preceding financial year end date;
(e) the profit or loss brought forward at the beginning of the financial year; and
(f) the profit or loss carried forward at the end of the financial year.
(2) The aggregate amount of dividends proposed by the directors for approval of the members at the next general meeting shall be stated in a note to the financial statements.
75. (1) Where any amount is transferred—
(a) to or from any reserves; or
(b) to any provision for liabilities; or
(c) from any provision for liabilities other than for the purpose for which the provision was established;
and the reserves or provisions for liabilities are or would, but for
paragraph 4(3)(b)
, be shown as separate items in the undertaking’s balance sheet, the information mentioned in
subparagraph (2)
shall be given in respect of each such reserve or provisions for liabilities.
(2) That information is—
(a) the amount of the reserves or provisions for liabilities as at the date of the beginning of the financial year and as at the financial year end date respectively;
(b) any amount transferred to or from the reserves or provisions for liabilities during that year; and
(c) the source and application respectively of any amounts so transferred.
(3) Particulars shall be given of each provision included in
Liabilities item E.3
(other provisions for liabilities) in the undertaking’s balance sheet in any case where the amount of that provision is material.
Provision for taxation
76. The amount of any provision for deferred taxation shall be shown separately from the amount of any provision for other taxation.
Details of indebtedness
77. (1) In respect of each item shown under “creditors” in the undertaking’s balance sheet there shall be stated—
(a) the aggregate amount of any debts included under that item which are payable or repayable otherwise than by instalments and fall due for payment or repayment after the end of the period of 5 years beginning with the day next following the end of the financial year; and
(b) in the case of any debts so included which are payable or repayable by instalments, the amount of any instalments which fall due for payment after the end of that period.
(2) Subject to
subparagraph (3)
, in relation to each debt falling to be taken into account under
subparagraph (1)
, the terms of payment or repayment and the rate of any interest payable on the debt shall be stated.
(3) If the number of debts is such that, in the opinion of the directors, compliance with
subparagraph (2)
would result in a statement of excessive length, it shall be sufficient to give a general indication of the terms of payment or repayment and the rates of any interest payable on the debts.
(4) In respect of each item shown under “creditors” in the undertaking’s balance sheet there shall be stated—
(a) the aggregate amount of any debts included under that item in respect of which any security has been given; and
(b) an indication of the nature of the securities so given.
(5) References in
subparagraph (1)
to an item shown under “creditors” in the undertaking’s balance sheet include references, where amounts falling due to creditors within one year and after more than one year are distinguished in the balance sheet—
(a) in a case within
subparagraph (1)
, to an item shown under the latter of those categories; and
(b) in a case within
subparagraph (4)
, to an item shown under either of those categories;
and references to items shown under “creditors” include references to items which would, but for
paragraph 4(3)(b)
, be shown under that heading.
78. If any fixed cumulative dividends on the undertaking’s shares are in arrears, there shall be stated, distinguishing between those shares presented as a liability and other shares—
(a) the amount of the arrears; and
(b) the period for which the dividends or, if there is more than one class, each class of them are in arrears.
Guarantees and other financial commitments
79. (1) Particulars shall be given of any charge on the assets of the undertaking to secure the liabilities of any other person, including, where practicable, the amount secured.
(2) The following information shall be given with respect to any other contingent liability not provided for (other than a contingent liability arising out of an insurance contract)
(a) the amount or estimated amount of that liability;
(b) its legal nature; and
(c) whether any valuable security has been provided by the undertaking in connection with that liability and, if so, what.
(3) There shall be stated, where practicable—
(a) the aggregate amount or estimated amount of contracts for capital expenditure, so far as not provided for; and
(b) the aggregate amount or estimated amount of capital expenditure authorised by the directors which has not been contracted for.
(4) Particulars shall be given of
(a) any unfunded retirement benefit commitments included under any provision shown in the undertaking’s balance sheet; and
(b) any such commitments for which no provision has been made;
and, where any such commitment relates wholly or partly to retirement benefits payable to past directors of the undertaking, separate particulars shall be given of that commitment so far as it relates to such retirement benefits.
(5) The following information shall also be given
(a) the nature of every retirement benefit scheme operated by, or on behalf of, the undertaking including information as to whether or not each scheme is a defined benefit scheme or a defined contribution scheme;
(b) whether each such scheme is externally funded or internally financed;
(c) whether any retirement benefit costs and liabilities are assessed in accordance with the advice of a professionally qualified actuary and, if so, the date of the most recent relevant actuarial valuation;
(d) whether and, if so, where any such actuarial valuation is available for public inspection.
(6) Particulars shall also be given of any other financial commitments, other than commitments arising out of insurance contracts, which—
(a) have not been provided for; and
(b) are relevant to assessing the undertaking’s financial position.
Miscellaneous matters
80. Particulars shall be given of any case where the cost of any asset is for the first time determined under
paragraph 35
.
Information supplementing the profit and loss account
81.
Paragraphs 82
to
88
require information which either supplements the information given with respect to any particular items shown in the profit and loss account or otherwise provides particulars of income or expenditure of the undertaking or of circumstances affecting the items shown in the profit and loss account.
Separate statement of certain items of income and expenditure
82. Each of the following amounts shall be stated—
(a) the amount of interest on or any similar charges in respect of—
(i) bank loans and overdrafts made to the undertaking;
(ii) loans to the undertaking from group undertakings;
(iii) loans of any other kind made to the undertaking;
and
(b) the amount of income from listed and unlisted investments.
Particulars of tax
83. (1) The basis on which the charge for corporation tax, income tax and other taxation on profits (whether payable in or outside the State) is computed shall be stated.
(2) Particulars shall be given of any special circumstances which affect the liability in respect of taxation on profits, income or capital gains for the financial year concerned or the liability in respect of taxation of profits, income or capital gains for succeeding financial years.
(3) The following amounts shall be stated
(a) the amount of the charge for corporation tax;
(b) if the amount of the charge to corporation tax would have been greater but for relief from double taxation, the amount which it would have been but for such relief
(c) the amount of the charge for income tax; and
(d) the amount of the charge for taxation payable outside the State of profits, income and (so far as charged to revenue) capital gains.
(4) The amounts referred to in
subparagraph (3)
shall be stated separately in respect of each of the amounts which is or would, but for
paragraph 4(3)(b)
, be shown under the following items in the profit and loss account, that is to say
item III.9
(tax on profit or loss on ordinary activities) and item
III.14
(tax on extraordinary profit or loss).
Particulars of business
84. (1) As regards non-life insurance, the notes to the financial statements shall disclose—
(a) gross premiums written,
(b) gross premiums earned,
(c) gross claims incurred,
(d) gross operating expenses, and
(e) the reinsurance balance.
(2) The amounts required to be disclosed by
subparagraph (1)
shall be broken down between direct insurance and reinsurance acceptances, if reinsurance acceptances amount to 10 per cent or more of gross premiums written.
(3) Subject to
subparagraph (4)
, the amounts required to be disclosed by
subparagraphs (1)
and
(2)
with respect to direct insurance shall be further broken down into the following groups of classes—
(a) accident and health,
(b) motor, third party liability,
(c) motor, other classes,
(d) marine, aviation and transport,
(e) fire and other damage to property,
(f) third-party liability,
(g) credit and suretyship,
(h) legal expenses,
(i) assistance, and
(j) miscellaneous,
where the amount of the gross premiums written in direct insurance for each such group exceeds ten million euro.
(4) The amounts relating to the three largest groups of classes in an undertaking’s business shall in any event be disclosed.
85. (1) As regards life assurance, the notes to the financial statements shall disclose—
(a) gross premiums written, and
(b) the reinsurance balance.
(2) The notes relating to gross premiums written shall be broken down between direct insurance and reinsurance acceptances, where reinsurance acceptances amount to 10
per cent
or more of gross premiums written, and within direct insurance shall be broken down to indicate—
(a)(i) individual premiums,
(ii) premiums under group contracts,
(b)(i) periodic premiums,
(ii) single premiums,
(c)(i) premiums from non-participating contracts,
(ii) premiums from participating contracts,
(iii) premiums from contracts where the investment risk is borne by policy holders.
(3) Disclosures of any amount required by
clause (a), (b)
or
(c)
of subparagraph (2) shall not be required where that amount does not exceed 10 per cent of the gross premiums written in direct insurance.
86. (1) Subject to
subparagraph (2)
, there shall be disclosed as regards both non-life insurance and life assurance the total gross direct insurance premiums resulting from contracts concluded by the undertaking—
(a) in the EEA state where there is situated its head office,
(b) in the other EEA states, and
(c) in other countries.
(2) Disclosure of any figure referred to in
subparagraph (1)
above shall not be required if it does not exceed 5
per cent
of total gross premiums.
Commissions
87. There shall be disclosed the total amount of commissions of any kind for direct insurance business accounted for in the financial year, including acquisition, renewal, collection and portfolio management commission.
Miscellaneous matters
88. (1) Where any amount relating to any preceding financial year is included in any item in the profit and loss account, the effect shall be stated.
(2) Particulars shall be given of any extraordinary income or changes arising in the financial year.
(3) The effect shall be stated on any transactions that are exceptional by virtue of size or incidence though they fall within the ordinary activities of the undertaking.
(4) Any amount expended on research and development in the financial year, and any amount committed in respect of research and development in subsequent years, shall be stated.
(5) Where, in the opinion of the directors, the disclosure of any information required by
subparagraph (4)
would be prejudicial to the interests of the undertaking, that information need not be disclosed, but the fact that any such information has not been disclosed shall be stated.
Related party transactions
89. (1) Particulars shall be given in the notes to the financial statements of an undertaking of transactions which have been entered into with related parties by the undertaking if such transactions are material and have not been concluded under normal market conditions and the particulars shall include the amount of such transactions, the nature of the related party relationship and other information about the transactions which is necessary for an understanding of the financial position of the undertaking.
(2) The provision of particulars and other information about individual transactions may be aggregated according to their nature, except where separate information is necessary for an understanding of the effects of related party transactions on the financial position of the undertaking.
(3)
Subparagraph (1)
shall not apply to transactions which are entered into between 2 or more members of a group if any subsidiary undertaking which is party to the transaction is wholly owned by such a member.
(4) A word or expression that is used in this paragraph and is also used in Directive 2006/46/EC of the European Parliament and the Council of 14 June 2006
3
has the same meaning in this paragraph that it has in that Directive.
General
90. Where sums originally denominated in foreign currencies have been brought into account under any items shown in the balance sheet or profit and loss account, the basis on which those sums have been translated into euro or, if different, the functional currency of the undertaking, shall be stated.
PART VI
SPECIAL PROVISIONS WHERE AN UNDERTAKING IS A HOLDING UNDERTAKING OR SUBSIDIARY UNDERTAKING
Entity financial statements
91. (1) This Part applies where the undertaking is a holding undertaking, whether or not it is itself a subsidiary undertaking.
(2) Where an undertaking is a holding undertaking shall have or a subsidiary undertaking and any item required by
Part II
to be shown in the undertaking’s balance sheet, in relation to group undertakings, includes—
(a) amounts attributable to dealings with or interests in any holding undertaking or fellow subsidiary undertaking; or
(b) amounts attributable to dealings with or interests in any subsidiary undertaking of the undertaking;
the aggregate amounts within
clauses (a)
and
(b)
, respectively, shall be shown as separate items, either by way of subdivision of the relevant item in the balance sheet or in a note to the undertaking’s financial statements.
Guarantees and other financial commitments in favour of group undertakings
92. Commitments within any of the subparagraphs of
paragraph 79
(guarantees and other financial commitments) which are undertaken on behalf of or for the benefit of—
(a) any holding undertaking or fellow subsidiary undertaking; or
(b) any subsidiary undertaking of the undertaking;
shall be stated separately from the other commitments within that subparagraph, and commitments within
clause (a)
shall also be stated separately from those within clause (
b
).
93. (1) Subject to
subparagraph (2)
, where the undertaking is a holding undertaking, the number, description and amount of the debentures of the undertaking held by its subsidiary undertakings or their nominees shall be disclosed in a note to the undertaking’s financial statements.
(2)
Subparagraph (1)
does not apply in relation to any debentures—
(a) in the case of which the subsidiary undertaking is concerned as personal representative; or
(b) in the case of which it is concerned as trustee;
provided that in the latter case neither the undertaking nor a subsidiary undertaking of the undertaking is beneficially interested under the trust, otherwise than by way of security only for the purposes of a transaction entered into by it in the ordinary course of a business which includes the lending of money.
94. (1) Where an undertaking is a subsidiary undertaking, the information specified in
subparagraphs (2)
,
(3)
and
(4)
shall be stated with respect to the holding undertaking of—
(a) the largest group of undertakings for which group financial statements are drawn up and of which the undertaking is a member; and
(b) the smallest such group of undertakings.
(2) The name of the holding undertaking shall be stated.
(3) There shall be stated—
(a) if the holding undertaking is incorporated, the country in which it is incorporated; or
(b) if it is unincorporated, the address of its principal place of business.
(4) If copies of the group financial statements referred to in
subparagraph (1)
are available to the public, there shall be stated the addresses from which copies of the financial statements can be obtained.
Provisions of general application
95. (1) This paragraph applies where an undertaking is a holding undertaking and either—
(a) does not prepare group financial statements; or
(b) prepares group financial statements which do not deal with one or more of its subsidiary undertakings;
and references in this paragraph to subsidiary undertakings shall be read, in a case within
clause (b)
, as references to such of the subsidiary undertakings of the undertaking concerned as are excluded from the group financial statements.
(2) Subject to the following provisions of this paragraph, there shall be given in the notes to the undertaking’s entity financial statements—
(a) the reasons why subsidiary undertakings are not dealt with in group financial statements; and
(b) a statement—
(i) showing any qualifications contained in the reports of the statutory auditors of the subsidiary undertakings on their financial statements for their respective financial years ending with or during the financial year of the undertaking; and
(ii) of any note or saving contained in those financial statements to call attention to a matter which, apart from the note or saving, would properly have been referred to in such a qualification;
in so far as the matter which is the subject of the qualification or note is not covered by the undertaking’s entity financial statements and is material from the point of view of its members.
(3) Subject to the following provisions of this paragraph, the aggregate amount of the total investment of the holding undertaking in the shares of the subsidiary undertakings shall be stated in a note to the undertaking’s entity financial statements by way of the equity method of accounting.
(4) In so far as information required by any of the preceding provisions of this paragraph to be stated in a note to the undertaking’s entity financial statements is not obtainable, a statement to that effect shall be given instead in a note to those entity financial statements.
(5) Where, in any case within
subparagraph (1)(b)
, the undertaking prepares group financial statements, references in the preceding subparagraphs to the undertaking’s entity financial statements shall be read as references to the group financial statements.
96. Where an undertaking has subsidiary undertakings whose financial years did not end with that of the undertaking, the following information shall be given in relation to each such subsidiary undertaking (whether or not dealt with in any group financial statements prepared by the undertaking) by way of a note to the undertaking’s entity financial statements or (where group financial statements are prepared) to the group financial statements, that is to say—
(a) the reasons why the undertaking’s directors consider that the subsidiary undertakings’ financial years should not end with that of the undertaking; and
(b) the dates on which the subsidiary undertakings’ financial years ending last before that of the undertaking respectively ending or the earliest and latest of those dates.
97. References in this Part to shares held by an undertaking shall be construed as being held or not being held by that undertaking in accordance with the rules set out in
section 7
of the Principal Act.
PART VII
INTERPRETATION OF CERTAIN EXPRESSIONS IN THIS SCHEDULE
General
98. The following definitions apply for the purposes of this Schedule and its interpretation
"fellow subsidiary undertaking" shall have the same meaning as in
section 275
of the Principal Act;
"group" means a holding undertaking and its subsidiary undertakings;
"group undertaking" has the meaning assigned to it by
section 275
of the Principal Act;
“Insurance and Reinsurance Directive” means Directive 2009/138/EC of the European Parliament and of the Council of 25 November 2009
4
;
"lease" includes an agreement for a lease;
"long lease" means a lease in the case of which the portion of the term for which it was granted remaining unexpired at the end of the financial year is not less than 50 years;
"short lease" means a lease which is not a long lease.
Assets: fixed or current
99. For the purposes of this Schedule, assets of an undertaking shall be taken to be fixed assets if they are intended for use on a continuing basis in the undertaking’s activities, and any assets not intended for such use shall be taken to be current assets.
Capitalisation
100. References in this Schedule to capitalising any work or costs are references to treating that work or those costs as a fixed asset.
Investment property
101. In this Schedule “investment property” means land or buildings (or both) held to earn rentals or for capital appreciation (or both).
Listed investments
102. In this Schedule, “listed investments” means investments as respects which there has been granted a listing on—
(a) any regulated market or other stock exchange in the State;
(b) any regulated market or other stock exchange of repute in any other EEA state; or
(c) any stock exchange of repute in a state that is not an EEA state.
Loans
103. For the purposes of this Schedule, a loan shall be treated as falling due for payment, and an instalment of a loan shall be treated as falling due for payment, on the earliest date on which the lender could require repayment or (as the case may be) payment, if the lender exercised all options and rights available to him or her.
Materiality
104. Amounts which in the particular context of any provision of this Schedule are not material may be disregarded for the purposes of that provision.
Provisions
105. (1) References in this Schedule to provisions for depreciation or diminution in value of assets are references to any amount written off by way of providing for depreciation or diminution in value of assets.
(2) Any reference in the profit and loss account formats set out in
Part II
to the depreciation of, or amounts written off, assets of any description is a reference to the movement in any provision for depreciation or diminution in value of assets of that description.
106. References in this Schedule to provisions for liabilities are references to any amount retained as reasonably necessary for the purpose of providing for any liability the nature of which is clearly defined and which exists at the financial year end date but, as respects the amount of which or the date on which it will be settled, there is uncertainty.
Purchase price
107. References in this Schedule (however expressed) to the purchase price of an asset of an undertaking or of any raw materials or consumables used in the production of any such asset shall be read as including references to any consideration (whether in cash or otherwise) given by the undertaking in respect of that asset or in respect of those materials or consumables (as the case may require).
SCHEDULE 2
ACCOUNTING PRINCIPLES, FORM AND CONTENT OF GROUP FINANCIAL STATEMENTS
PART I
CONSTRUCTION OF REFERENCES TO PROVISIONS OF THIS SCHEDULE
Notice of the making of this Statutory Instrument was published in
“Iris Oifigiúil” of
23
rd June
, 2015.
I, MICHAEL NOONAN , Minister for Finance, in exercise of the powers conferred on me by
section 3
of the
European Communities Act 1972
(No. 27 of 1972) and for the purpose of giving effect to Council Directive 91/674/EEC of 23 December 1991
1
, hereby make the following regulations
Citation and commencement