The Investment Company admits breaching IASs
1 Sep 08
The Investment Company has corrected its accounts after the Financial Reporting and Review Panel ruled that it broke rules on participating preference shares (PPSs)
The Investment Company has corrected its accounts after the Financial Reporting and Review Panel ruled that it broke rules on participating preference shares (PPSs).
The London company invests in PPSs and other securities. It corrected, by a prior adjustment, the way it treated PPSs for the years ended 31 March 2006 and 2007. The company admitted that breaking IAS (International Accounting Standard) 32 in presenting the PPSs as equity also infringed IAS 1.
Compliance in the accounts to 31 March 2007 would have reduced net assets and shareholders’ funds from £10.25m to £7.7m (2006: £10.4m to £7.9m) and reduced net revenue after taxation of £349,201 (2006: £342,855) to a net loss after taxation of £435 (2006: £50,181).
The Investment Company said the shares were accounted for as equity in accordance with an earlier version of IAS 32. Its original policy - adopted for the 2006 and 2007 accounts - of recognising the gain or loss on disposal in a capital reserve, also failed to comply with the relevant standard, IAS 39.