Section 378 CAMA 2020
Section 378 Companies and Allied Matters Act is about Form and content of individual financial statements. It is under Chapter 14 (Financial statements, audit and accounting records) of the Act.
(1) The financial statements of a company prepared under section377 of this Act, shall comply with the requirements of the First Schedule to this Act (so far as applicable) with respect to their form and content, and with the accounting standards laid down in the statements of accounting standards issued by the Financial Reporting Council of Nigeria, provided such accounting standards do not conflict with the provisions of this Act or the First Schedule to this Act.
(2) The balance sheet shall give a true and fair view of the state of affairs of the company as at the end of the year, and the profit and loss account shall give a true and fair view of the profit or loss of the company forthe year.
(3) The statement of the source and application of funds shall provide information on the generation and utilisation of funds by the company during the year.
(4) The value added statement shall report the wealth created by the company during the year and its distribution among various interest groups such as the employees, government, creditors, proprietors and the company.
(5) The five-year financial summary shall provide a report for a comparison over a period of five years or more of vital financial information.
(6) Subsection (2) overrides—
(a) the requirements of the First Schedule to this Act ; and
(b) all other requirements of this Act as to the matters to be included inthe accounts of a company or in notes to those accounts, and accordingly,the provisions of subsections (7) and (8) shall have effect.
(7) If the balance sheet or profit and loss account drawn up in accordance with those requirements would not provide sufficient information to comply with subsection (2), any necessary additional information shall be provided in that balance sheet, profit and loss account or in a note to the accounts.
(8) If, owing to special circumstances in the case of any company,compliance with any such requirement in relation to the balance sheet or profitand loss account would prevent compliance with subsection (2), (even if additional information were provided in accordance with subsection (4)), the directors shall depart from that requirement in preparing the balance sheet or profit and loss account (so far as necessary) in order to comply with subsection (2).
(9) If the directors depart from any such requirement, particulars of the departure, the reasons for it and its effects shall be given in a note to the accounts.
(10) Subsections (1)-(9) do not apply to group accounts prepared under section 379 (1) and (2) apply to a company’s profit and loss account (or require the notes otherwise required in relation to that account) if—
(a) the company has subsidiaries ; and
(b) the profit and loss account is framed as a consolidated account dealing with all or any of the subsidiaries of the company as well as the company—
(i) complies with the requirements of this Act relating to consolidated profit and loss account, and
(ii) shows how much of the consolidated profit and loss for the year is dealt with in the individual financial statements of the company.
(11) If group financial statements are prepared and advantage is taken of subsection (7), that fact shall be disclosed in a note to the group financial statements.
