Paragraph 31A Inclusion of financial instruments at fair valueF1

(1)

Subject to sub-paragraphs (2) to (4), financial instruments, including derivative financial instruments, may be included at fair value.

(2)

Sub-paragraph (1) only applies to financial instruments which constitute liabilities if—

(a)

they are held as part of a trading portfolio; F2...

(b)

they are derivative financial instrumentsF3; or

(c)

they are financial instruments falling within sub-paragraph (3A).

(3)

F4Unless they are financial instruments falling within sub-paragraph (3A) below, sub-paragraph (1) does not apply to—

(a)

non-derivative financial instruments held to maturity;

(b)

loans and receivables originated by the society or connected undertakings of the society and not held for trading purposes;

(c)

interests in connected undertakings or joint ventures;

(d)

equity instruments issued by the society or connected undertakings of the society;

(e)

contracts for contingent consideration in a business combination; and

(f)

other financial instruments with such special characteristics that the instruments, according to generally accepted accounting principles or practice, should be accounted for differently from other financial instruments.

(F53A)

Financial instruments which, under F6UK-adopted international accounting standards within the meaning of section 474(1) of the Companies Act 2006, may be included in accounts at fair value, may be so included, provided that the disclosures required by such accounting standards are made.

(4)

If the fair value of a financial instrument cannot be determined reliably in accordance with paragraph 31B, sub-paragraph (1) does not apply to that financial instrument.

(5)

In this paragraph, “joint venture” means an undertaking, other than a connected undertaking, which a society manages jointly with one or more undertakings.

Annotations

Textual amendments

F1: Sch. 7 Pt. 6A inserted (31.12.2004 with application in accordance with reg. 1(2) of the amending S.I.) by The Building Societies (Accounts and Related Provisions) (Amendment) Regulations 2004 (S.I. 2004/3199), regs. 1(1), 8(3)
F2: Word in Sch. 7 para. 31A(2)(a) omitted (29.6.2008 with application in accordance with reg. 1(2) of the amending S.I.) by virtue of The Building Societies (Accounts and Related Provisions) (Amendment) Regulations 2008 (S.I. 2008/1143), regs. 1(2), 5(a)
F3: Sch. 7 para. 31A(2)(c) and word inserted (29.6.2008 with application in accordance with reg. 1(2) of the amending S.I.) by The Building Societies (Accounts and Related Provisions) (Amendment) Regulations 2008 (S.I. 2008/1143), regs. 1(2), 5(b)
F4: Words in Sch. 7 para. 31A(3) inserted (29.6.2008 with application in accordance with reg. 1(2) of the amending S.I.) by The Building Societies (Accounts and Related Provisions) (Amendment) Regulations 2008 (S.I. 2008/1143), regs. 1(2), 5(c)
F5: Sch. 7 para. 31A(3A) inserted (29.6.2008 with application in accordance with reg. 1(2) of the amending S.I.) by The Building Societies (Accounts and Related Provisions) (Amendment) Regulations 2008 (S.I. 2008/1143), regs. 1(2), 5(d)
F6: Words in Sch. 7 para. 31A(3A) substituted (31.12.2020) by The International Accounting Standards and European Public Limited-Liability Company (Amendment etc.) (EU Exit) Regulations 2019 (S.I. 2019/685), reg. 1(2), Sch. 1 para. 54 (with reg. 1(3)(4)) (as amended by S.I. 2020/523, regs. 1(2), 22); 2020 c. 1, Sch. 5 para. 1(1)