Group reconstructions generally arise when a company or business is moved around within a group. This can happen for a variety of reasons, but is usually done to make the group more efficient or there may be tax reasons for a group reconstruction.

When a group reconstruction takes place, it is merely a ‘rearrangement’ of the group as opposed to an acquisition or disposal of group member(s).

Group reconstructions are dealt with in FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland in paragraphs 19.27–19.32 and the disclosure requirements for such reconstructions are in para 19.33.