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A cautionary tale: how to fail to show accounts are GAAP-compliant

Speed read
In a rather elegant decision, reviewing a hearing lasting from 2–11 October 2023 and occupying only 26 pages, the First-tier Tribunal held that Barclays Bank PLC’s (‘BB PLC’) accounting treatment for Reserve Capital Instruments (‘RCIs’) was not GAAP-compliant and that, if it had been GAAP-compliant, the debits in respect of what was claimed to be an accruing discount of £800m did not ‘fairly represent’ the cost to BB PLC of issuing the RCIs and should, therefore, not be brought into account under the loan relationship rules. The decision reads as something of a cautionary tale as to how not to discharge the burden of proof that accounts are GAAP-compliant.

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