Companies Act 2014 section 296

Consistency of financial statements

Section 296 requires the directors of a holding company to ensure that the entity financial statements of the holding company and its subsidiary undertakings are prepared using the same financial reporting framework, subject to certain exceptions and exemptions.

• Directors of a holding company must ensure that entity financial statements of both the holding company and each subsidiary undertaking are prepared using the same financial reporting framework, unless there are good reasons not to do so, which must be disclosed in the holding company's entity financial statements.
• The consistency requirement only applies to entity financial statements of subsidiary undertakings that are required to be prepared under this Act, and does not apply to undertakings that do not trade for the acquisition of gain by their members.
• The requirement does not apply where the directors of the holding company do not prepare group financial statements for the holding company.
• Where the holding company prepares both IFRS group financial statements and IFRS entity financial statements, the consistency requirement applies only among the subsidiary undertakings — the holding company itself is not required to use the same framework as its subsidiaries, allowing it to use IFRS while subsidiaries use a different framework.