Companies Act 2006 - statements of capital - consultation on financial information required

Comments from ACCA to the Department for Business, Innovation and Skills (BIS), 1 December 2009.

ACCA is pleased to comment on the consultation on statements of capital. Our responses to the consultation questions are set out below. 

Question 1:  Do you agree with the description of the problems set out in paragraphs 27-29?

Yes. The main problem with the current drafting is that the Act requires information to be collected and reported in respect of ‘each share’ in the company. Even if the information were capable of being collected, the disclosure of such information is not in our view likely to be useful to any class of reader. Above all the Act needs to make clear that aggregate information is all that is required. 

Question 2:  Do you have any other concerns about the financial information requirements in the statement of capital?

No. 

Question 3:  Do you agree with the conclusion that number of shares in total and in each class should be included in the statement of capital for all companies?

Yes. 

Question 4:  Do you agree with the conclusion that total paid up nominal value of issued shares should be required for statements regarding the formation of both public and private companies?

Yes.

Question 5: Do you believe that the benefit to readers of including the total paid up nominal value of issued shares in other statements of capital would justify imposing on the company the cost of providing it?

Yes. It should not be difficult or unreasonably burdensome to produce this information on an on-going basis. 

Question 6:  Do you agree with the conclusion that amounts unpaid up on shares in each class should be included in the statement of capital for all companies?

Yes, provided it is clear that the information is to be in aggregate form. But see our comment below on Q7. 

Question 7: Do you agree with the conclusion that the total nominal value of issued shares should continue to be required in the statement of capital for public companies?

While this in itself is a useful item of information and one which will not be difficult for companies to disclose, it seems superfluous to require disclosure of this item as well as figures for total paid up nominal value and total unpaid nominal value. Perhaps this figure could be used at the expense of the figure addressed in Q6. 

Question 8:  Do you believe that the benefit to readers of including the total nominal value of issued shares in the statement of capital for private companies would justify imposing on the company the cost of providing it?

This figure would be useful for readers to cross-reference against the figure addressed by Q 4 & 5. Again we would not see a requirement to disclose this figure as being unduly burdensome. 

Question 9:  Do you believe that the benefit to readers of including the aggregate value of the share premium account in the statement of capital would justify imposing on the company the cost of providing it? 

Yes. The value of the premium agreed to be paid on shares is an informative  adjunct to the figures disclosed for their nominal value.  

Question 10:  Do you agree with our assessment of the value and costs of the information?

Yes, with the possible exception of mandating the disclosure of amounts unpaid.