HC Deb 19 March 1990 vol 169 c432W
Mr. Austin Mitchell

To ask the Secretary of State for Trade and Industry whether his Department will issue recommendations on the accounting treatment of good will.

Mr. Redwood

No. The Accounting Standards Committee has recently published an exposure draft of a proposed revised standard on accounting for good will, inviting comments by 30 July. My Department is considering the draft and will make any comments in due course.

Mr. Austin Mitchell

To ask the Secretary of State for Trade and Industry why his representative on the auditing practices committee does not have a vote.

Mr. Redwood

The terms of reference set by the Consultative Committee of Accountancy Bodies for its auditing practices committee provide that voting members shall be nominated by their professional accountancy bodies. In addition, up to seven non-voting members, including two Government representatives, may be co-opted.

Mr. Austin Mitchell

To ask the Secretary of State for Trade and Industry what consideration he has given to providing a statutory definition of a balance sheet.

Mr. Redwood

Section 228(2) of the Companies Act 1985 states that the balance sheet shall give a true and fair view of the state of affairs of the company at the end of the financial year, and schedule 4 to the Act sets out rules on the form and content of the balance sheet. These provisions are subject to amendment when part I of the Companies Act 1989 comes into force on 1 April. I do not believe that any further statutory definition is needed.

Mr. Austin Mitchell

To ask the Secretary of State for Trade and Industry whether he will take steps to provide a statutory definition of an asset.

Mr. Redwood

No. The definition of an asset is one of the issues which was addressed in the exposure draft ED 42 entitled "Accounting for special purpose transactions" published by the Accounting Standards Committee in March 1988. I understand that a further document will be published in the summer.

Mr. Austin Mitchell

To ask the Secretary of State for Trade and Industry if he has any plans to legislate to change companies' practice of showing fixed assets in the balance sheet at original cost less depreciation.

Mr. Redwood

Under the alternative accounting rules of paragraph 31 of schedule 4 to the Companies Act 1985, fixed assets may be shown at values or costs other than original cost less depreciation. I have no plans to legislate to change current practice.