UK: Finance Act 2009 explanatory notes published

Explanatory notes for the Finance Act (2009) have been published: see here (html) and here (pdf). The notes provide a brief explanation of the new duty imposed on the senior accounting officer (or officers) of large companies by Section 93 and Schedule 46:

Large companies make a major contribution to the Exchequer. Inadequate tax accounting arrangements within such companies (or groups) can lead to misreporting of tax liabilities of very large amounts. Currently, there is no legal obligation on any particular director or company officer to ensure that the company has appropriate tax accounting arrangements. This section and Schedule will make the senior accounting officer of a company personally responsible for doing so. Ensuring appropriate tax accounting arrangements are in place is no more than compliant companies will be doing already. The requirement on senior accounting officers to take reasonable steps to ensure appropriate tax accounting should in most instances merely underpin that good practice. Where large companies have not established appropriate tax accounting arrangements to enable accurate tax reporting, tax is at risk. Senior accounting officers of such companies will be required by this section to take appropriate action to remedy that situation.

Section 93 and Schedule 46 provide that senior accounting officers of qualifying companies are required to take reasonable steps to ensure that the company establishes and maintains appropriate tax accounting arrangements. Qualifying companies must notify HMRC of the name of the senior accounting officer. The section includes a power to impose penalties on both senior accounting officers and companies who fail to comply with these requirements. The change has effect in relation to financial years beginning on or after the day this Act is passed.

India: Companies Bill 2009 introduced in the Lok Sabha

The Companies Bill 2009 was introduced today in the Lok Sabha by the Corporate Affairs Minister Shri Salman Khurshid. A copy of the Bill will be available here. For further information, including an overview of the Bill, see the press release published by the Ministry of Corporate Affairs. 

UK: Lord Myners on the Walker Review and the ownerless company

Lord Myners, the Financial Services Secretary, was interviewed by the BBC's Business Editor, Robert Peston, in a TV programme - Leading Questions - broadcast last Saturday. Lord Myners repeated his call for the radical reform of bank corporate governance and argued that institutional investors need to become effective owners (as opposed to investors) in order to prevent what he called the "ownerless company". 

Lord Myners suggested that Sir David Walker's recommendations had not gone far enough with regard to remuneration. He also stated that consideration should be given to introducing differential voting rights in order to provide an incentive for institutions to take ownership more seriously. This suggestion has attracted much attention. A report in today's Financial Times notes criticism from the National Association of Pension Funds. Criticism from the Association of British Insurers was noted in a report in Saturday's Telegraph newspaper. 

The interview can be viewed below (but only for those in the UK) and will be available until 4:59am on 8 August. If the video does not appear embedded below, try watching it here. 

Resources for learning and teaching: accounting education website

Within the past month the links on the right side of this page have been reorganised and expanded. A new category - Resources for Learning and Teaching - has been added which includes websites created for the specific purpose of supporting the teaching of corporate governance (and closely related subjects). Included in this category is the excellent Accounting Education site which provides, inter alia, very useful updates concerning UK financial reporting and accounting.

UK: ICAEW/ICAS guidance - realised profits/losses and distributions under the Companies Act 2006

The ICAEW and ICAS have published a joint technical release: 01/09 - Guidance on the determination of realised profits and losses in the context of distributions under the Companies Act 2006.