Corporation Tax Act 2009 section 558

Interpretation of accounting expressions

Section 558 explains how certain accounting terms and expressions used elsewhere in this Chapter should be interpreted, particularly regarding the timing of recognising financial assets or liabilities and extending company-focused rules to persons more broadly.

• When determining whether an amount is recorded as a financial asset or liability relating to an advance, you must assume the period of account ended immediately after the advance was received or made.
• This assumed cut-off date creates a clear point in time for assessing whether an accounting entry exists in respect of the advance.
• The rule in section 309(1), which normally applies to companies regarding accounts that are not GAAP-compliant, is extended so that it applies to any person, not just a company.
• These interpretive rules apply throughout the Chapter and ensure consistency in how accounting recognition is assessed for tax purposes.