Yn ddilys o 01/04/2009
362Parties becoming connected where creditor's rights subject to impairment adjustmentU.K.
(1)This section applies if—
(a)a company (“D”) is a party to a loan relationship as debtor,
(b)another company (“C”) which—
(i)is a party to the loan relationship as creditor, and
(ii)is not connected with D,
becomes connected with D, and
(c)the pre-connection carrying value would have been adjusted for impairment if a period of account had ended immediately before the companies became connected.
(2)C is treated as releasing its rights under the loan relationship when C and D become connected.
(3)The amount treated as released is the amount of the impairment adjustment referred to in subsection (1)(c).
(4)In subsection (1)(c) “the pre-connection carrying value” means the amount that would be the carrying value of the asset representing the loan relationship in C's accounts if a period of account had ended immediately before the companies became connected.
(5)For the purposes of subsection (4) the carrying value is determined taking no account of—
(a)accrued amounts,
(b)amounts paid or received in advance, or
(c)impairment losses.