Corporation Tax Act 2009 section 621

Company partners using fair value accounting

Section 621 requires that where a company partner accounts for its partnership interest using fair value accounting, the derivative contract credits and debits attributed to that partner must also be determined on a fair value basis.

• This section applies when a company that is a partner in a firm uses fair value accounting for its interest in that firm.
• The credits and debits from the firm's derivative contracts that are allocated to the company partner must be calculated using fair value accounting.
• This ensures consistency between the accounting method the company partner uses for its partnership interest and the method used to determine its share of derivative contract gains and losses.
• The rule overrides any other basis that might otherwise apply when calculating the company partner's share of credits and debits from the firm's derivative contracts.