SCHEDULES
C1C10C3C2C5C4C6C7C9SCHEDULE 26Derivative contracts
Sch. 26 extended (retrospective to 30.9.2002) by Finance Act 2003 (c. 14), s. 177(4)(8)(11)
Sch. 26 applied by 1988 c. 1, s. 440(2B) (as amended (with effect in accordance with s. 52(3) of the amending Act) by Finance Act 2004 (c. 12), Sch. 10 para. 70)
Sch. 26 modified by 1996 c. 8, s. 94A (as inserted (with effect in accordance with s. 52(3) of the amending Act) by Finance Act 2004 (c. 12), Sch. 10 para. 13)
Sch. 26 applied (with modifications) (5.10.2004) by Energy Act 2004 (c. 20), s. 198(2), Sch. 9 para. 24 (with s. 38(2)); S.I. 2004/2575, art. 2(1), Sch. 1
Sch. 26 applied (with modifications) (5.10.2004) by Energy Act 2004 (c. 20), s. 198(2), Sch. 9 para. 12 (with s. 38(2)); S.I. 2004/2575, art. 2(1), Sch. 1
Sch. 26 modified (8.6.2005) by Railways Act 2005 (c. 14), s. 60(2), Sch. 10 para. 7; S.I. 2005/1444, art. 2(1), Sch. 1
Sch. 26 modified (8.6.2005) by Railways Act 2005 (c. 14), s. 60(2), Sch. 10 para. 19; S.I. 2005/1444, art. 2(1), Sch. 1
Sch. 26 modified (19.7.2006) by Finance Act 2006 (c. 25), s. 136(2)(e)
Part 4F2Computation of amounts to be brought into account
Words in Sch. 26 Pt. 4 heading substituted (with effect in accordance with s. 52(3) of the amending Act) by Finance Act 2004 (c. 12), Sch. 10 para. 49
17AF1Computation in accordance with generally accepted accounting practice
1
Subject to the provisions of this Schedule F6(including, in particular, paragraph 15(1)), the amounts to be brought into account by a company for any period for the purposes of this Schedule are those that, in accordance with generally accepted accounting practice, are recognised in determining the company’s profit or loss for the period.
F71A
But, in the case of a contract which is a derivative contract for the purposes of this Schedule by virtue of paragraph 3(1)(b) (contracts treated for accounting purposes as financial asset or liability), the amounts to be so brought into account as respects the contract must be determined on the basis of fair value accounting.
2
If a company does not draw up accounts in accordance with generally accepted accounting practice (“correct accounts”)—
a
the provisions of this Schedule apply as if correct accounts had been drawn up, and
b
the amounts referred to in this Schedule as being recognised for accounting purposes are those that would have been recognised if correct accounts had been drawn up.
3
If a company draws up accounts that rely to any extent on amounts derived from an earlier period of account for which the company did not draw up correct accounts, the amounts referred to in this Schedule as being recognised for accounting purposes in the later period are those that would have been recognised if correct accounts had been drawn up for the earlier period.
4
The provisions of sub-paragraphs (2) and (3) apply where the company does not draw up accounts at all as well as where it draws up accounts that are not correct.
17BAmounts recognised in determining company’s profit or loss
C81
Any reference in this Schedule to an amount being recognised in determining a company’s profit or loss for a period is to an amount being recognised for accounting purposes—
a
in the company’s profit and loss account F3or income statement,
b
in the company’s statement of recognised gains and losses or statement of changes in equity, or
c
in any other statement of items brought into account in computing the company’s profits and losses for that period.
F42
An amount that in accordance with generally accepted accounting practice is shown as a prior period adjustment in any such statement as is mentioned in sub-paragraph (1) shall be brought into account for the purposes of this Schedule in computing the company's profits and losses for the period to which the statement relates.
This does not apply to an amount recognised for accounting purposes by way of correction of a fundamental error.
17CPower to make further provision by regulations
1
The Treasury may by regulations make provision—
a
excluding amounts of a prescribed description from paragraph 17B(1);
b
requiring amounts of a prescribed description that do not fall within paragraph 17B (1) (by virtue of regulations under paragraph (a) above or otherwise) to be brought into account in determining a company’s profit or loss for a period in prescribed circumstances;
c
as to the manner in which any such amounts are to be brought into account.
2
The regulations may (in particular) make provision by reference to the fact that amounts derive from or otherwise relate to amounts brought into account in a prescribed manner in a previous period of account.
3
The power to make regulations under this paragraph includes—
a
power to make different provision for different cases; and
b
power to make provision subject to an election or to other prescribed conditions.
4
Regulations under this paragraph may apply, exclude or modify any of the provisions of this Schedule in relation to cases for which provision is made by the regulations.
F521Basis of accounting for contracts falling within paragraph 6, 7 or 8
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Sch. 26 modified by 1996 c. 8, s. 86(3C) (as inserted (24.7.2002 with effect as mentioned in s. 82(2) of the amending Act) by 2002 c. 23, s. 82, Sch. 25 Pt. 1 para. 6(3))