a Requirement to Produce Accounts

The Companies Act 1985 uses the term "accounts", whilst standard-setters use the term "financial statements" (see 2.2 below).

For single companies, Section 226 (as amended by Statutory Instrument 2947, see below) requires the directors to prepare accounts, referred to as the company's "individual accounts". Under the revised requirements of the Companies Act 1985 which come into effect for accounts periods commencing on or after 1 January 2005, (see below), the individual accounts may be prepared either:

1. In accordance with Section 226A: these are referred to in the Act as "Companies Act individual accounts" and effectively constitute UK GAAP; or

2. In accordance with International Accounting Standards: these are referred to in the Act as "IAS individual accounts" and must be based on IFRS requirements (see Chapter 7).

Section 227 (as amended) has equivalent requirements for group accounts.

b Content Requirements

Section 226A specifies that "Companies Act individual accounts" must comprise a balance sheet and a profit and loss account.

The accounts of an individual company prepared and presented on the basis of UK GAAP should comply with the provisions of Schedule 4 of the Companies Act 1985 (as amended by SI 2947) as regard form and content (small companies may use Schedule 8, as amended by SI 2947 see Chapter 22).

Schedule 4 also contains requirements on accounting rules.

Group accounts should comply with Schedule 4A. Under UK GAAP, the term "financial statements" refers to the four primary statements:

• Profit and loss...