Question to the Department for Business and Trade:

To ask His Majesty's Government, further to the Written Answers by Baroness Jones of Whitchurch on 10 March (HL5235), why the guidance was not developed to address matters relating to distributable profits given that, under part 23 of the Companies Act 2006, annual accounts are the relevant accounts for determining whether a distribution is lawful.

The guidance referred to in HL5235 is the FRC's Guidance on the Going Concern Basis of Accounting and Related Reporting (including Solvency and Liquidity risks). This guidance was developed to support companies in completing their 'going concern statement' and not to address matters relating to distributable profits. The Institute of Chartered Accountants England and Wales (ICAEW) currently prepares guidance on how companies should calculate their distributable reserves.