Companies Act 2014 section 321

Disclosure of accounting policies

Section 321 requires companies to disclose the accounting policies they have adopted in the notes to both their individual (entity) and group financial statements.

• Companies must disclose in the notes to their entity financial statements the accounting policies used to determine the items and amounts in the balance sheet and profit and loss account.
• Where group financial statements are prepared, the notes must similarly disclose the accounting policies used for the consolidated balance sheet and consolidated profit and loss account.
• If a company changes an accounting policy, the notes must explain the reason for the change and, as far as practicable, show the impact on both the current year's and preceding years' financial statements.
• These disclosure requirements apply to both entity-level and group-level financial statements, ensuring transparency for users of the accounts.