Finance Act 2002

Bad debt etc: cases where departure allowed from assumption of prompt payment in full

8 (1) Paragraph 5 of Schedule 9 is amended as follows.

(2) After sub-paragraph (1) (departure from assumption of full and prompt payment of debt allowed only to extent debt is bad debt etc) insert—

“(1A) Such a departure shall be made only where the first and second conditions (set out in sub-paragraphs (2) and (2A) below) are satisfied.”.

(3) In sub-paragraph (2) (requirement for appropriate adjustments in form of credits where bad debt etc is paid or departure otherwise ceases to be allowed) for “Such a departure shall be made only where” substitute “The first condition is that”.

(4) After sub-paragraph (2) insert—

“(2A) The second condition is that, in determining the credits and debits to be brought into account in respect of exchange gains and losses, the accounting arrangements allowing the departure require a debt—

(a) to be left out of account, to the extent that such a departure is allowed; and

(b) to be taken into account again, to the extent that it is represented by credits brought into account under sub-paragraph (2) above.”.