Technical Query

kennyb3

Being going around in circles with this for a while so if anyone can help i'd appreciate it.

Is a cashflow statement required for an (small) industrial and provident society as part of the financial statements?

Heres the problem:

From what i can see an industrial and provident society cant avail of the exemption's under FRS 1 as it doesnt satisfy any of the criteria listed (i.e its not a small company under the 1986 Company Act - as its not a company at all)

But I rang the registry of friendly society who informed me they only need an I & E and balance sheet - no cashflow statement. Surely if one was required they'd have to enforce same?

Add to that the I & P Act seems to be quiet on what is required in the financial statements.

Review of some larger co-operatives (Dairygold) financial statements show consolidated cash flows. But again these are at a much greater size and level to the I & P involved.

J.Ryan

I'd imagine that it is required, but don't have the references to hand to support that opinion.

Contact your institute.

mari2222

FRS 1 (unless there is a newer version) probably tells you.:)

dbran

Hi

FRS1 applies if the accounts are required to show a true and fair view. Therefore FRS1 should (in theory) apply to any type of entity and not be limited to just limited companies. ie friendly societies. The fact that the Registrar of Friendly Societies do not require a cashflow statement to be actually filed would be a separate issue. I suspect this just means that they wont reject the submission if the cashflow statement is not included.

The exemption to prepare a cashflow statement applies to small companies or entities. For entities that are not governed by company law, the exemption criteria should be looked at as if the entity in question was incorporated as a company. ie FRS1 uses the criteria of company law to determine if the entity is small without inferring that the entity has to be a company.

So the question is firstly, are the accounts that are laid before the members of the entity required to show a true and fair view? Then secondly, if the entity was actually incorporated as a company, would the entity be 1) within the scope of the 1986 Companies Amendment Act at all which deals with small companies exemption and 2) if so, would it be a small company as regards turnover, gross assets, number of employees etc.

That would be my take on it. Hope this helps

Kind Regards

dbran

kennyb3

Thanks dbran for the response.

The cashflow statement was included in the end. Your thinking is along much the same lines as my own.

Was interested to see others thoughts.

Thanks again