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 May (HL31), how systemic such adjustments are if audited accounts are merely a “starting point“; and whether the result of companies having to do that has been subject to an impact assessment in terms of (1) burdens on business, and (2) the risk of hiding insolvency.

Companies calculate their distributable profits under Part 23 of the Companies Act 2006, and as such, it is an individual decision at the company level as to whether to make a distribution.

An impact assessment on the Companies Act 2006 was published in January 2007 and is attached to this response.