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Financial Reporting Act 2013

External Reporting Board, standards, and provisions that apply to other enactments - Standards - Financial reporting standards

19: Financial reporting standards may classify entity as subsidiary

You could also call this:

"Rules can say a smaller company is part of a bigger one, even if it doesn't meet certain criteria."

Illustration for Financial Reporting Act 2013

When you read about financial reporting standards, you might see that an entity, which is like a company, can be classified as a subsidiary of another entity. This means the first entity is controlled by the second one, so it's basically like a smaller part of the bigger entity. You can be classified as a subsidiary even if you don't meet the rules in section 5 of the Companies Act 1993 that say what a subsidiary is. This classification can happen because of the financial reporting standards, which are like rules for how entities report their finances.

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Money and consumer rights > Banking and loansBusiness > Industry rules
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18: Non-GAAP standards, or

"Rules that are not the usual accounting rules"

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19A: Guidance for purposes of non-financial reporting, or

"Help with reporting things that aren't about money"

Part 2External Reporting Board, standards, and provisions that apply to other enactments
Standards: Financial reporting standards

19Financial reporting standards may classify entity as subsidiary

  1. A financial reporting standard may classify an entity (A) as a subsidiary of another entity (B) where A is, in effect, controlled by B so as to render A, in substance, a subsidiary of B.

  2. A financial reporting standard may classify an entity as a subsidiary of another entity regardless of whether it is a subsidiary under, or taken to be controlled for the purposes of, section 5 of the Companies Act 1993.

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