»Ê¹ÚÌåÓýapp

CTA09/S133C

»Ê¹ÚÌåÓýapp disclosure condition ensures that the compensation restriction only applies to significant misconduct issues in the context of the company’s operations. »Ê¹ÚÌåÓýapp condition is met when the issue was material enough to be disclosed in a “relevant documentâ€� in any accounting period within the first five years. See BKM204200 for guidance on the meaning of relevant document.

»Ê¹ÚÌåÓýapp condition covers disclosures which are explicit or implicit, and companies will need to apply judgement as to whether issues have been disclosed for these purposes. Broadly, the condition is intended to ensure that only issues which are significant enough for a company to have to disclose them should be within scope.

»Ê¹ÚÌåÓýapp disclosure condition is not met where a company discloses an issue without saying that compensation will be paid or where the company says it ‘mayâ€� have to pay compensation. This represents cautious disclosure, there is not the degree of certainty that is required for the compensation rules to apply. Once the company knows that it will have a liability to pay compensation, it will make a further decision about whether a disclosure should be made and it is this which will govern whether the issue is within the scope of the legislation.

»Ê¹ÚÌåÓýapp disclosure condition is met where the disclosure is made in the period in which the expenses are incurred, or in any previous period. This has the effect that once an issue has been disclosed, any future expenses in accounts should be disallowed, even if the issue has subsequently become less material in the context of the company’s operations.