Question to the Department for Business, Energy and Industrial Strategy:

To ask Her Majesty's Government, further to the Written Answer by Lord Callanan on 20 December 2021 (HL4706), which said that the Companies Act 2006 “does not establish a requirement for the company to disclose its undistributable reserves”, what consideration they have given to amending that answer in light of the Financing Reporting Council Publication Miscellaneous Reports By Auditors Required By The United Kingdom Companies Act 2006, published in March, which said that “With respect to the auditor’s responsibility, the auditor’s statement states that it is restricted to an examination of the relationship between the company’s net assets and it’s called up share capital and undistributable reserves as stated in the audited balance sheet".

No consideration has been given to amending the response to HL4706. The Companies Act 2006 does not establish a requirement for the company to disclose its undistributable reserves. The publication referenced provides guidance for auditors when making reports required, in certain circumstances, by The Companies Act 2006. Proposals to require certain companies to disclose their distributable reserves were included in the Government’s response to Restoring trust in audit and corporate governance.