Company distributions have become a controversial subject. The reviews by the BEIS Select Committee, Sir John Kingman and Sir Donald Brydon have all referred to this.

A number of questions have been raised:

• Are accounting standards and the current ICAEW guidance alone satisfactory for regulatory distributable reserves?
• Does the realisation regime need to change to meet creditors’ and shareholders’ needs?
• Should distributable reserves be calculated at a group level?
• Should ARGA take responsibility for oversight of distributable reserves?
• Should further disclosures be made on distributable reserves?

We believe that all those concerns can be addressed. The question is how to do so.

The aims of this Capital Maintenance paper are to examine the issues and sketch out, for debate, possible ways forward.

Resolution of these key issues is a core element of the programme of work required to restore trust in the profession.