Paragraph 2

(1)

Where, at any time during a society’s financial year to which relevant accounts relate, the society has had an associated body or associated bodies and, in the opinion of the directors of the society, that association was material to the state of the affairs of the society as at the end of that financial year, there shall be set out by way of note on the society’s balance sheet such information as is sufficient to enable that balance sheet to give a true and fair view of the effect of that association on that state of affairs, so far as that effect concerns the society’s members.

(2)

Any note to which sub-paragraph (1) above applies shall not contain information sufficient for the purposes of that sub-paragraph unless it contains—

(a)

in respect either of each associated body to which the note applies separately or of all those associated bodies in aggregate, at least the matters set out in sub-paragraph (3) below, and

(b)

in respect of each such associated body to which sub-paragraph (4) below applies, the statement referred to in that sub-paragraph.

(3)

The matters set out in this sub-paragraph are—

(a)

the cost to the society of investment in each such associated body;

(b)

a statement setting out the amount which the directors of the society consider represents the net worth of each such associated body attributable to the society at the end of that financial year of the society;

(c)

a statement setting out the amount which the directors of the society consider represents the share of the profit or loss for the association period of each such associated body attributable to the society;

(d)

the aggregate of amounts outstanding (including accrued interest) in respect of—

(i)

any lending by the society to each such associated body and

(ii)

any deposits of each such associated body with the society,

at the end of that financial year of the society; and

(e)

the aggregate of balances outstanding at the end of that financial year of the society on any business other than that stated in paragraph (d) above which fall to be paid—

(i)

by the society to each such associated body, and

(ii)

by each such associated body to the society.

(4)

The statement referred to in this sub-paragraph is a statement of any qualifications in the report of the auditors of any associated body on its accounts for a financial year ending during, or on the last day of, the financial year of the society with which it is associated.

(5)

In this paragraph—

“association period” means the period, within the society’s financial year, in which the society and the associated body have been associated, and
“net worth” means any amount attributed or attributable to capital and reserves excluding any amount attributed or attributable to goodwill.