Commentary

D1.840 Recognition of profit

Corporate tax
Corporate tax | Commentary

D1.840 Recognition of profit

Corporate tax | Commentary

D1.840 Recognition of profit

Accounting periods beginning on or after 1 January 2016

For accounting periods beginning on or after 1 January 2016 references to amounts recognised in determining a company's profit or loss for an accounting period are to amounts that are recognising in the company's accounts for that period as an item of profit or loss. This includes a reference to an amount that was previously recognised as an item of other comprehensive income and which is transferred to become an item of profit or loss in determining the company's accounting profit or loss for that accounting period. The terms an 'item of profit and loss' and an 'item of other comprehensive income' are defined as having the meaning that they have for accounting purposes1.

There is provision to ensure that an amount which has been recognised in other comprehensive income and that has not been recycled to profit or loss at the time that a company ceases recognise the derivative contract in its accounts is brought into account in computing the company's derivative contract profits if at the time that the company ceases to be a party to the derivative contract, or at any later time, it is not expected that such amount will in future be recycled to profit or loss. In such cases the amount is required to be included in computing the company's derivative contract profits for the accounting period in which the relevant time falls. This provision also applies in the same way where

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