Commentary

D1.815 Derivatives—accounting test

Corporate tax
Corporate tax | Commentary

D1.815 Derivatives—accounting test

Corporate tax | Commentary

Derivative contracts—accounting test

D1.815 Derivatives—accounting test

In order for a derivative contract to fall within the derivative contracts legislation it must1:

  1.  

    •     be treated for accounting purposes as a derivative (see below)

  2.  

    •     be a contract that is not treated as a derivative financial instrument because it fails to meet the definition of a derivative in FRS 26, para 9(b)—note that the definition of a derivative that is contained in the successor standards to FRS 26 (which no longer apply for accounting periods beginning on or after 1 January 2015), namely IAS 39, which applies where a company adopts FRS 101, or FRS 102, is the same as that formerly contained in FRS 26 and that both these standards contain the same exclusion to that formerly contained in FRS 26 para 9(b)—(see below) and the contract for accounting purposes is, or forms part of, a financial asset or liability2. This test is designed to catch

To continue reading
View the latest version of this document, as well as thousands of others like it, sign in to TolleyLibrary or register for a free trial