# Companies Act 1985, Paragraph 12

Extent: E+W+S

The amount of any item shall be determined on a prudent basis, and in particular—
(a) only profits realised at the balance sheet date shall be included in the profit and loss account; and
(b) all liabilities . . . which have arisen . . . in respect of the financial year to which the accounts relate or a previous financial year shall be taken into account, including those which only become apparent between the balance sheet date and the date on which it is signed on behalf of the board of directors in pursuance of section 233 of this Act.

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Source: https://www.legislation.gov.uk/ukpga/1985/6/schedule/8/paragraph/12 (the official version)
Page: https://openlegislation.uk/companies-act-1985/schedule-8/paragraph-12
Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives.