FRRP rejected Eurovestech’s claim that the subsidiary undertakings that
appeared on its balance sheets had not been consolidated because it would not
give a true and fair view of the company’s interest in these investments.
Eurovestech had explained that its venture capital investments (which are
subsidiary undertakings) were carried in the balance sheet in accordance with
the company’s normal policy on valuation. It outlined that the investments were
held exclusively for resale within the company’s portfolio, and with a view to
the ultimate realisation of capital gains, although not necessarily with a view
to disposal within the year of acquisition as required by
An FRRP statement said: ‘Consequently, the directors considered that
consolidation would not give a true and fair view of the company’s interest in
these investments, and invoked the true and fair override in order not to
consolidate them in the group accounts.
‘While the Panel accepted that the directors had acted in good faith, it did
not accept the use of the true and fair override in this case as the company was
unable to demonstrate special circumstances warranting a departure from the
requirements of the accounting standard. The two subsidiary undertakings in
question accounted for more than 50% of the company’s portfolio, and had
directors appointed by the company. The Panel was of the view that the
subsidiary undertakings should be consolidated within the Group accounts.’
Does Darwin's theory apply to taxation? Colin ponders...
The EC has been instructed to draft a European Union (EU) directive authorising an EU financial transaction tax, which would apply to ten of the EU’s 28 member states
Accountancy watchdog the FRC has dropped its investigation into the former chief financial officer of Tesco, nearly two years after the supermarket was engulfed in an accounting scandal
Colin imagines how Apple's logo might change in the wake of the EC's ruling over its Irish tax arrangements