B5.717 Computation of reportable income
From 27 May 2011 the following rules do not apply to transparent reporting funds, as to which see B5.718A1.
A reporting fund must provide a computation of reportable income for a period of account, based on the 'total comprehensive income for the period' where IAS is used or based on the equivalent entries where it is not used2. Adjustments are made for capital items, special classes of income, and any arrangements to adjust income based on the number of units in issue (previously referred to as equalisation arrangements — see below). Any adjustment to the starting point figure is only made once even if such a n adjustment could be made under more than one part of the regulations3. If the computation results in a negative amount the reportable income is nil4.
Capital and miscellaneous items
The capital items for which adjustment is required are profits, gains or losses that would fall within 'net capital gains/losses' in the statement of total return if the accounts were prepared in accordance with IMA SORP5 but applied to an offshore fund in the same way as to an authorised investment fund. The figure used as the starting point must be adjusted by adding losses and deducting gains6. A trade profit or loss is not a capital item for these purposes7.
An additional adjustment is also required for expenses related to the acquisition or disposal of investments, costs relating to the setting up, merger or dissolution of the fund, and, for reporting
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