Companies Act 2014 section 290

Obligation to prepare entity financial statements under relevant financial reporting framework

Section 290 requires company directors to prepare entity financial statements each financial year and sets out which financial reporting framework must or may be used.

• Directors must prepare entity financial statements for every financial year; these are the company's statutory financial statements unless group financial statements are also prepared.
• Companies may generally choose between two frameworks: Companies Act entity financial statements (under section 291) or IFRS entity financial statements (under international financial reporting standards and section 292), but companies not trading for profit must use the Companies Act framework.
• Once a company adopts IFRS, it must continue using IFRS for all subsequent years unless a relevant change of circumstances occurs — such as becoming a subsidiary of a non-IFRS group, or the company or its parent ceasing to have securities traded on an EEA regulated market.
• Even without a change of circumstances, a company may switch back from IFRS to the Companies Act framework provided it has not already made such a voluntary switch in the preceding five years; any subsequent return to IFRS resets the rules as though that year were the first IFRS year.