The Upper Tribunal, in Ball UK Holdings has upheld the decison of the First Tier Tribunal that the company was not entitled under accounting standards to switch its financial statements to US dollars. The company was an intermediate holding company, ultimately owned by a US parent. By switching to dollars from sterling, the company claimed to crystallise a large tax-deductible loss on loans.
Mrs Justice Falk and Judge Jonathan Cannan had to consider whether accounting standards were a matter of law – such that an appeal lay to the Upper Tribunal. They ruled that “findings about the meaning as well as the practical application of FRS 23 are properly matters of fact”. As such, their interpretation was to be determined by the First Tier Tribunal, relying upon expert evidence.
Accounting standards “are documents written by accountants for accountants, and are intended to identify proper accounting practice, not law. No accountant would consider turning to a lawyer for assistance in their interpretation, and nor should they.”
The judges agreed that the findings of fact by the lower tribunal were conclusions it was entitled to reach – and the company’s appeal was rejected.