Corporation Tax Act 2009 section 615

Change of accounting policy after ceasing to be party to derivative contract

Section 615 deals with what happens when a change of accounting policy causes a difference in the outstanding amounts relating to a derivative contract that the company has already ceased to hold.

• When a company has stopped being party to a derivative contract and there is a difference in the amount outstanding between the end of one period and the start of the next, that difference must be recognised as a credit or debit in the later period
• The amount outstanding comprises any deferred income or deferred loss from the contract not yet brought into account for tax, plus any amounts recognised in other comprehensive income that have not been transferred to profit or loss
• The credit or debit is only required to the extent it would not already be brought into account under another provision
• The accounting policy used for the current period is assumed to have applied in all earlier periods, unless the company's accounts are properly drawn up under a different assumption in accordance with generally accepted accounting practice