Finance Leasing Manual - FLM49.15

Consolidated accounts: Schedule 12 FA 1997

For the purposes of Schedule 12 FA 1997 we are interested in the consolidated accounts because there should be less chance that they will not reflect the true earnings on the targeted leases. It is the consolidated results that non-tax outsiders - for example, the City, shareholders, lenders - focus on.

There are cases where FRS2 will not apply. For example, where there is a foreign ultimate parent or where one of the exemptions applies: paragraph 21 of FRS 2. The approach in Schedule 12 is to look for the result which would be obtained if the Standard had applied and been applied correctly. See paragraph 28, Schedule 12, FA 1997, discussed at FLM31.31.