SCHEDULE 3INSURANCE COMPANIES: COMPANIES ACT INDIVIDUAL ACCOUNTS
PART 2ACCOUNTING PRINCIPLES AND RULES
SECTION CVALUATION AT FAIR VALUE
Accounting for changes in value34
1
This paragraph applies where a financial instrument is valued in accordance with paragraph 30 or 32 or an asset is valued in accordance with paragraph 33.
2
Notwithstanding paragraph 18 in this Part of this Schedule, and subject to sub-paragraphs (3) and (4), a change in the value of the financial instrument or of the investment property or living animal or plant must be included in the profit and loss account.
3
Where—
a
the financial instrument accounted for is a hedging instrument under a hedge accounting system that allows some or all of the change in value not to be shown in the profit and loss account, or
b
the change in value relates to an exchange difference arising on a monetary item that forms part of a company’s net investment in a foreign entity,
the amount of the change in value must be credited to or (as the case may be) debited from a separate reserve (“the fair value reserve”).
4
Where the instrument accounted for—
a
is an available for sale financial asset, and
b
is not a derivative,
the change in value may be credited to or (as the case may be) debited from the fair value reserve.