What are IAS financial statements under section 488 of TIOPA 2010?

Under section 488, IAS financial statements means the consolidated financial statements of a worldwide group's ultimate parent entity and all its subsidiaries, prepared in accordance with international accounting standards (IFRS) for the relevant period. This definition applies throughout the worldwide debt cap provisions in Part 10 of the Act.

How does the definition of IAS financial statements apply to a single-company worldwide group?

Where a worldwide group consists of just one company throughout the entire relevant period, there are no subsidiaries to consolidate. In that case, IAS financial statements refers to the individual financial statements of that single ultimate parent company, prepared under international accounting standards rather than consolidated accounts.

Why does the worldwide debt cap legislation require IAS financial statements?

The worldwide debt cap rules in Part 10 of TIOPA 2010 use IAS financial statements as a consistent benchmark for measuring a group's worldwide financing. Requiring IFRS-compliant consolidated accounts ensures uniformity and comparability when assessing whether a UK group's debt exceeds its appropriate share of the worldwide group's external debt.

What happens if a group disposes of all subsidiaries during a period?

If an ultimate parent disposes of all subsidiaries and operates as a standalone company for the entire period, it becomes a single-company worldwide group. The IAS financial statements for that period are then the parent's own individual IFRS-compliant financial statements, not consolidated accounts, since there are no subsidiaries to consolidate.

Taxation (International and Other Provisions) Act 2010 section 488

Meaning of "IAS financial statements"

Section 488 defines what "IAS financial statements" means for the purposes of the worldwide debt cap rules in Part 10 of the Act.

"IAS financial statements" generally means the consolidated financial statements of a worldwide group's ultimate parent and its subsidiaries, prepared under international accounting standards.
The statements must be drawn up for the relevant period in question.
Where the worldwide group consists of a single company throughout the entire period, the term refers instead to the individual financial statements of that single ultimate parent company, prepared under international accounting standards.
This definition applies throughout Part 10 of the Act wherever the term "IAS financial statements" is used.

Access full legislation.And much more.

By becoming a member, your team gets full access to Tax World research tools and source-backed tax resources.

Become a member