F Ltd has a December year end and heads up a moderately sized services group in the UK, but it is in turn part of a much larger international group headed by a listed company in the US. It submits monthly reporting to its parent, with more detail in a quarterly report. This information has historically been prepared under UK GAAP but with a column of ‘topside adjustments’ to make a few known changes for US GAAP (the intention is that the parent can use these adjusted figures immediately in its consolidation). Because the business model is relatively simple, these adjustments are quite clear cut, and the most significant are in respect of ‘push down’ accounting.

The parent requires that results are reported in USD: this is achieved by translating the profit and loss account at a group-provided average rate for each month, and the balance sheet at a group-provided closing rate. F’s statutory accounts are prepared in GBP.