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

To ask Her Majesty's Government, further to the Written Answers by Lord Callanan on 22 November (HL3771), and Lord Henley on 30 January 2019 (HL12948 and HL12949) and 27 February 2019 (HL13690), what assessment they have made of the compatibility of the objectives in IFRS17 with (1) the need for capital maintenance, creditor and shareholder protection for the purposes of the Companies Act 2006, and (2) the International Accounting Standards and European Public Limited-Liability Company (Amendment etc.) (EU Exit) Regulations 2019.

Ensuring adequate company capital is maintained to comply with the Companies Act 2006 creditor and shareholder protection requirements is part of a company’s directors’ duties.

The Government’s White Paper, Restoring Trust in Audit and Corporate Governance set out proposals for increasing confidence that the capital maintenance laws are being complied with, including proposals to require companies to report their distributable reserves and for directors to make a formal statement about the legality of proposed dividends. We are considering responses to the White Paper and will publish our conclusions in due course.

The UK Endorsement Board (UKEB) has been delegated powers to consider new International Financial Reporting Standards (IFRS) for UK adoption. This includes an assessment of the compatibility of new standards with the requirements of the International Accounting Standards and European Public Limited-Liability Company (Amendment etc.) (EU Exit) Regulations 2019 No. 685. The UKEB’s draft assessment of IFRS 17 against the criteria in that legislation is currently open for consultation.