Parent companies wishing to take advantage of FRS 101 'reduced disclosure framework' need to notify shareholders
Parent companies wishing to take advantage of FRS 101 'reduced disclosure framework' need to notify shareholders.
Below is an example of the typical wording that they may wish to adopt.
Notification to shareholders in accordance with FRS 101 – reduced disclosure framework
New UK accounting framework introduced by the Financial Reporting Council applies for the financial statements of UK companies. Under this framework, the company is required to prepare its parent company financial statements for its financial year commencing xxxxx on one of the new bases permitted.
The parent proposes to elect to adopt FRS 101 ‘Reduced Disclosure Framework’ and to take advantage of the permitted election to the disclosure exemptions allowed under FRS 101.
The parent's decision to adopt FRS 101 does not require shareholder approval. This election allows the parent to take disclosure exemptions permitted under FRS 101, and accordingly the parent is required to notify all shareholders of this election. Any shareholder or shareholders holding in aggregate 5% or more of the total allotted shares in the parent may object. Objections must be served in writing and delivered to the company secretary at the company's registered office xxxxxxxxxxxx not later than xxxxxxxx.
This notification will apply on a continuing basis until such time as the company notifies its shareholders of any change to its chosen accounting framework for the parent company financial statements.