# The Building Societies (Accounts and Related Provisions) Regulations 1998, Paragraph 31E: Accounting for changes in value of financial instruments


(1) This paragraph applies where a financial instrument is valued in accordance with paragraph 31A or 31C.
(2) Notwithstanding paragraph 4 in Part 1 of this Schedule, and subject to sub-paragraphs (3) and (4) below, a change in the value of the financial instrument shall be included in the income and expenditure account.
(3) Where—
(a) the financial instrument accounted for is a hedging instrument under a hedge accounting system that allows some or all of the change in value not to be shown in the income and expenditure account, or
(b) the change in value relates to an exchange difference arising on a monetary item that forms part of a society’s net investment in a foreign entity,
the amount of the change in value shall be credited to or (as the case may be) debited from a separate reserve (“the fair value reserve”).
(4) Where the instrument accounted for—
(a) is an available for sale financial asset, and
(b) is not a derivative financial instrument,
the amount of the change in value may be credited to or (as the case may be) debited from the fair value reserve.

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Source: https://www.legislation.gov.uk/uksi/1998/504/schedule/7/paragraph/31E (the official version)
Page: https://openlegislation.uk/building-societies-accounts-and-related-provisions-regulations-1998/schedule-7/paragraph-31E
Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives.