The Loan Relationships and Derivative Contracts (Exchange Gains and Losses using Fair Value Accounting) Regulations 2005

Calculation of residual profit and loss

9.—(1) Where there is a fair value profit, the residual profit is calculated by subtracting from the profit any exchange gain, and adding to it the amount of any exchange loss.

(2) Where the exchange gain exceeds the fair value profit, the difference between the two is the residual loss.

(3) Where there is a fair value loss, the residual loss is calculated by adding to the loss any exchange gain or subtracting from it any exchange loss.

(4) Where the exchange loss exceeds the fair value loss the difference between the two is the residual profit.

(5) Residual profits and losses are amounts recognised in determining a company’s profit or loss for a period for the purposes of section 85B(1)(1) of the Finance Act 1996 and paragraph 17B(1)(2) of Schedule 26 to the Finance Act 2002.

(1)

This section together with section 85A substituted for former sections 85 and 86 by paragraph 3 of Schedule 10 to the Finance Act 2004 with effect for periods of account beginning on or after 1st January 2005, and, in the case of a company required to prepare accounts under the Companies Act 1985 or the Companies Act (Northern Ireland) Order 1986, any period of account beginning before that date for which the company is required or permitted to prepare such accounts in accordance with international accounting standards.

(2)

Paragraphs 17A to 17C were substituted for former paragraphs 17 to 20 by paragraph 50 of Schedule 10 to the Finance Act 2004 with effect for periods of account beginning on or after 1st January 2005, and, in the case of a company required to prepare accounts under the Companies Act 1985 or the Companies Act (Northern Ireland) Order 1986, any period of account beginning before that date for which the company is required or permitted to prepare such accounts in accordance with international accounting standards.