94Debts incurred and later releasedU.K.
This section has no associated Explanatory Notes
(1)This section applies if—
(a)in calculating the profits of a trade, a deduction is allowed for the expense giving rise to a debt owed by the company carrying on the trade,
(b)all or part of the debt is released, and
(c)the release is not part of a statutory insolvency arrangement.
(2)The amount released—
(a)is brought into account as a receipt in calculating the profits of the trade, and
(b)is treated as arising in the accounting period in which the release is effected.