5.1 Background and Scope

FRS 1, Cash flow statements applies to all financial statements intended to give a true and fair view of financial position and profit or loss but is not mandatory for the following entities:

1. Certain subsidiaries which are included in consolidated accounts provided specific conditions are satisfied:

   • 90% or more of the voting rights must be controlled within the group;

   • the consolidated accounts must be "publicly available";

   • "publicly available", a term used also in FRS 8 on Related party disclosures, is not defined. However, it seems reasonable to assume that the consolidated accounts must be filed in a public registry. Additionally, it may be advisable to state in the subsidiary's accounts where the consolidated accounts may be obtained.

2. Mutual life assurance companies.

3. Pension funds.

4. Certain open-ended investment funds as defined in FRS 1.

5. Building societies.

6. Small companies entitled under the Companies Act 1985 to file abbreviated accounts.

7. Entities that would have qualified as small companies as per (f) above had they been companies incorporated under Companies Act 1985 e.g. accounts of small unincorporated entities intended to present a true and fair view.

Not exempt

The implications of the above are that the following are not exempt from publishing cash flow statements (unless they fall within (a) above):

• PLCs big and small;

• Financial services companies (authorized persons under the Financial Services Act 1986);

• Medium-sized companies;

• Medium-sized groups:

  • if group accounts are prepared, the cash flow statement will relate to the group;

  • if the exemption from the preparation of group accounts is claimed,...