Companies Act 2014 section 293

Obligation to prepare group financial statements under relevant financial reporting framework

Section 293 sets out the obligation on directors of a holding company to prepare group financial statements covering the holding company and all its subsidiary undertakings, in addition to entity financial statements, and the rules governing the choice between Companies Act and IFRS reporting frameworks.

• Directors of a holding company must prepare group financial statements for the group each financial year, unless the company qualifies for the small or micro companies regime, in which case preparation is optional
• Group financial statements may be prepared either as "Companies Act group financial statements" (under section 294) or as "IFRS group financial statements" (under international financial reporting standards and section 295), except that groups not trading for members' gain must use the Companies Act framework
• Once a holding company adopts IFRS group financial statements, it must generally continue using IFRS unless a relevant change of circumstances occurs, or it exercises a one-off right to switch back to Companies Act statements provided it has not already done so within the preceding five years
• Exemptions from the requirement to prepare group financial statements are available under sections 299 to 302, covering situations such as intermediate holding companies within EEA or non-EEA groups, groups where all subsidiaries are excluded from consolidation, and IFRS-permitted exemptions

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