Building Societies (Accounts and Annual Return) Regulations 1983

Publication Date:January 01, 1983

1983No. 1768

BUILDING SOCIETIES

The Building Societies (Accounts and Annual Return) Regulations 1983

29thNovember1983

8thDecember1983

31stDecember1983

The Chief Registrar of Friendly Societies, with the consent of the Treasury, in exercise of the powers conferred upon him by sections 78(2), 88(3) and 91(2) of the Building Societies Act 1962(a), and of all other powers enabling him in that behalf, hereby makes the following Regulations:—

Citation and Commencement

1. These Regulations may be cited as the Building Societies (Accounts and Annual Return) Regulations 1983, and shall come into operation on 31st December 1983.

Interpretation

2.—(1) For the purposes of these Regulations unless the context otherwise requires—

"listed investment" means an investment as respects which there has been granted a listing on the Stock Exchange, or bonds issued by a local authority in whole or in part to a bank, discount house, issuing house or broker in the City of London and "unlisted investment" shall be construed accordingly;

"long lease" means a lease in the case of which the portion of the term for which it was granted remaining unexpired at the end of the financial year is not less than 50 years;

"short lease" means a lease which is not a long lease;

"lease" includes any agreement for a lease;

"provision" means, subject to paragraph (2) below, any amount written off or retained by way of providing for depreciation, renewals or diminution in value of assets or retained by way of providing for any known liability (including any liability in respect of expenditure contracted for, and any disputed or contingent liability) of which the amount cannot be determined with substantial accuracy;

(a) 1962 c. 37.

"reserve" does not, subject to paragraph (2) below, include any amount written off or retained by way of providing for depreciation, renewals or diminution in value of assets or retained by way of providing for any known liability (including any liability in respect of expenditure contracted for, and any disputed or contingent liability) or any sum set aside for the purpose of its being used to prevent any undue fluctuations in charges for taxation;

"Mortgages" under the heading "Balance Sheet" in Schedule 1 to these Regulations means the amount due or outstanding in respect of advances secured on mortgage less any provision for anticipated losses thereon;

"deferred shares" has the meaning given by paragraph 2 of Schedule 1 to the Building Societies (Authorisation) Regulations 1981(a);

"social security costs" means any contributions by the society to any state social security or pension scheme, fund or arrangement;

"pension costs" includes any contributions other than contributions falling within the meaning of "social security costs" by the society for the purposes of any pension scheme established for the purpose of providing pensions for persons employed by the society, any sums set aside for that purpose and any amounts paid by the society in respect of pensions without first being so set aside;

"area board" includes any regional or local board or committee of the society other than one consisting wholly of main board directors of the society and/or full-time employees of the society.

(2) Where—

(a) any amount written off or retained by way of providing for depreciation, renewals or diminution in value of assets, or

(b) any amount retained by way of providing for any known liability (including any liability in respect of expenditure contracted for, and any disputed or contingent liability)

is in excess of that which in the opinion of the board of directors is reasonably necessary for the purpose, the excess shall be treated for the purposes of these Regulations as a reserve and not as a provision.

(3) In the application of these Regulations to Scotland—

"land of freehold tenure" means land in respect of which the building society is the proprietor of the dominium utile or, in the case of land not held on feudal tenure, is the owner;

"land of leasehold tenure" means land of which the building society is the tenant under a lease.

Revenue and Appropriation Account and Balance Sheet

3. The revenue and appropriation account and the balance sheet of a building society as respects a financial year of the society ending on or after 31st December 1983 shall, with such adaptations, additions or omissions as may be necessary to comply with section 78(1) of the Building Societies Act 1962, be in the forms set out in Schedule 1 to these Regulations and shall

(a) S.I. 1981/1488.

contain the particulars therein set out (except that any heading therein may be omitted if the entries in respect of such heading would be "Nil") and the particulars specified in regulations 4 to 10 of these Regulations.

4.—(1) The accounting policies adopted by the society in determining the amounts to be included in respect of items shown in the balance sheet and in determining the income and expenditure for the year shall be stated by way of separate note on the balance sheet.

(2) The date on which the revenue and appropriation account and balance sheet are approved by the board of directors shall be stated on the balance sheet.

5. The following particulars shall be shown separately in the revenue and appropriation account—

(a) the amounts respectively charged to revenue by way of provision for depreciation, renewals or diminution in value of fixed assets;

(b) the amount, if material, of any surplus or deficit on realisation of investments; and to the extent that such amount is not shown under the heading "Income" in the case of a surplus (or "Expenditure" in the case of a deficit) in the said revenue and appropriation account it shall be shown after the item "Excess of income over expenditure" and before the item "Corporation tax";

(c) the amount, if material, of any pension costs not included under the heading "Expenditure"; and such amount shall be shown after the item "Excess of income over expenditure" and before the item "Corporation tax" in the said revenue and appropriation account;

(d) if any amount is separately shown after the item "Excess of income over expenditure" in accordance with either paragraph (b) or paragraph (c) of this regulation, the aggregate of such amount or amounts and the amount of the item "Excess of income over expenditure";

(e) the amount transferred from general reserve; and

(f) the amount transferred to or from any reserve set aside for a particular purpose.

6.—(1) The following particulars shall be stated by way of note on the revenue and appropriation account, if not otherwise shown—

(a) the amount of the remuneration of auditors, including any sums paid to the auditors in respect of their expenses;

(b) the aggregate amount of—

(i) emoluments of members of area boards;

(ii) pensions of members or past members of area boards; and

(iii) any compensation to members or past members of area boards in respect of loss of office

and, in respect of main board directors or employees who are or have been members of area boards, there shall be included only such amounts as are payable by virtue of their membership of such boards in addition to amounts payable to them in respect of other services to the society;

(c) of the amount shown in respect of the item "Management expenses (including depreciation of fixed assets)" how much consists of—

(i) remuneration and expenses of staff (excluding any amounts required to be stated under regulation 7 below) stating separately, salaries and wages, social security costs incurred by the society on behalf of staff and other pension costs so incurred

(ii) office accommodation and office expenses

(iii) advertising

(iv) commission and agency fees

(v) depreciation of fixed assets

(vi) other expenses

and in relation to the amount of remuneration and expenses of staff there shall also be stated as at the end of the financial year the numbers of staff employed by the society at chief and administrative offices and at branch offices respectively, distinguishing between full-time staff and part-time staff;

(d) if the amount charged to revenue by way of provision for depreciation or diminution in value of assets has been determined otherwise than by reference to the amount of those assets as determined for making up the balance sheet, that fact shall be stated;

(e) if depreciation or replacement of fixed assets is provided for by some method other than a depreciation charge or provision for renewals, or is not provided for, the method by which it is provided for or the fact that it is not provided for, as the case may be;

(f) the financial year of the society, or the part of such year, in which the interest accrued in respect of which the amount shown in relation to the heading "Income tax" is computed;

(g) the basis on which the charge for corporation tax is computed;

(h) the amount, if material, of any transaction of an exceptional or non-recurrent nature;

(i) any material respects in which any items shown in the revenue and appropriation account are affected—

(i) by transactions of a sort not usually undertaken by the society or otherwise by circumstances of an exceptional or non-recurrent nature; or

(ii) by any change in the basis of accounting;

(j) any special circumstances which affect liability in respect of taxation of surplus, income or capital gains for the financial year or liability in respect of taxation of surplus, income or capital gains for succeeding financial years; and

(k) any amount applied in writing up or down the amount at which investments are determined for making up the balance sheet.

(2) The corresponding amounts for the immediately preceding financial year shall be stated for all items shown in the revenue and appropriation account.

(3) For the purposes of this regulation—

(a) the expression "emoluments" in relation to a member of an area board includes fees and percentages, any sums paid by way of expenses allowance in so far as those sums are charged...

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