Definition of an Investment Holding Undertaking for the Purpose of FRS105
John Murphy sheds some light upon the definition of an investment holding undertaking for the purpose of FRS105.
He will be looking deeper into the specifics of FRS105 at the Irish Accounting and Tax Summit.
Join Ireland’s #1 virtual CPD event of the year!
Transcript of Video
This transcript was created using AI and may contain some mistakes.
It’s just useful, I suppose. There’s no definition within the legislation. So we have to look to the EU I directive that brought this in which EU directive for 2013 34. So this defines it in, in that direct effect is undertaken with the sole objective, which is investor funds in various securities, real property under assets, which is sold.
So as to be sole aim of spreading bad risks, giving the shareholders, the benefit resource management of their assets or undertaken as a source with the investment are undertakes, fixed capital. If the sole objective is to acquire 40 page shares. So I suppose we’re not one we’re looking at these and you will have a situation where maybe you’re a bit wary. Well,
is this, could this come into definition? You just need to just break this definition out further. That, effectively in order to come into this definition, it was must be to sole aim of spreading investment risks. So if you’ve only got one type of asset in there at your hardly spreading investment risks, soyou’re not going to come in there and it must be managed.
So if you’re not actively managing it, then although you might have a number, different investments there and you’re not managing it, it doesn’t come with it. So, and so as again, this is just emphasizing the point. Um, there would have to be investments, good number of assets in order to be, determined to be spreading risk. So if you’re have the same type of assets you’re hardly spreading risk the same with property ,
the same vicinity
that’s hardly spreading risks. Um, where they don’t require active management meant unlikely going to come in with, in this definition as well. The company would have to be trading investments and shares, and these will be shown as current assets. both the fixed assets in the balance sheet. If you’re going to be saying that they are involved in this type of activity in order to come within the definition,
, I suppose, just be aware that that, that definition is there. Know, whar that is. And I suppose the examples kind of illustrate more practical points.