(1)This section applies if—
(a)the company has ceased to be a party to a derivative contract in an accounting period (“the cessation period”),
(b)section 608 (credits and debits to be brought into account in respect of profits and losses arising in the cessation period) applied to the cessation, and
(c)there is a difference between the amount outstanding in respect of the derivative contract (see subsection (5))—
(i)at the end of the earlier period, and
(ii)at the beginning of the later period.
(2)If that amount has increased, a credit of an amount equal to the increase must be brought into account in accordance with this Part for the later period.
(3)If that amount has decreased, a debit of an amount equal to the decrease must be brought into account in accordance with this Part for the later period.
(4)Subsections (2) and (3) do not apply so far as the credit or debit falls to be brought into account apart from this section.
(5)In subsection (1) “the amount outstanding in respect of the derivative contract” means so much of the recognised deferred income or recognised deferred loss from the derivative contract as has not been represented by credits or debits brought into account in accordance with this Part in respect of the contract.
(6)In subsection (5)—
“recognised deferred income”, in relation to a derivative contract, means the amount recognised in the company’s balance sheet in accordance with generally accepted accounting practice as deferred income in respect of the profits which arose from the contract or a related transaction in the cessation period, and
“recognised deferred loss”, in relation to a derivative contract, means the amount so recognised as deferred loss in respect of the losses which so arose.