Retail Mediation Activity data items: FAQs

RMA A: Balance sheet

Q: What period should the balance sheet cover?

A: The balance sheet is a snapshot of the financial position of a firm at a particular date. It should be completed to reflect the firm's financial position as of the last day of the reporting period.

Q: On what accounting basis should the balance sheet data be compiled?

A: On the basis of UK Generally Accepted Accounting Practice (UK GAAP) or International Accounting Standards (IAS).

Q: Should the balance sheet include the Appointed Representatives as well?

A: No, the balance sheet data should be submitted for the firm only, not its Appointed Representatives (ARs).

Q: Should client money form part of the balance sheet in RMA-A?

A: No. Client money does not belong to the firm and as such should not be included on the firm's balance sheet. Related balancing accounts should also be excluded.

Q: What are Material Post-Balance Sheet Events?

A: Material events can occur during reporting periods, therefore, when a firm is aware of a material change to its capital excess, it should immediately notify the appropriate regulator. This could be due to an adverse assessment of its assets after it had reported, or where dividend payments are substantially higher than envisaged at the time of reporting.

Q: Please explain some of the key terms on the RMA-A

A: 'Tangible assets' are assets that have physical substance and for which an approximate value can be attached. Examples include buildings, equipment, furniture and motor vehicles.
'Intangible assets' are assets that are not physical. For example, goodwill, copyrights, patents and intellectual property.
'Net current assets' are 'total current assets' minus 'total amounts falling due within one year'
'Net assets' is the net current capital position of the firm. It must equal the figure recorded for ‘Total Capital’ (25A).