Finance Act 2002

Reversal of previous accounting gain

12 (1) Where in a period of account a loss is recognised in the company’s profit and loss account reversing (in whole or in part) a gain recognised in a previous period of account in respect of which a credit was brought into account for tax purposes under Part 3 (credits in respect of intangible fixed assets), a corresponding debit shall be brought into account for tax purposes.

(2) The amount of the debit to be brought into account for tax purposes is:

where—

• Accounting Loss is the amount of the loss recognised for accounting purposes,

• Accounting Gain is the amount of the gain that is (in whole or in part) reversed, and

• Previous Credit is the amount of the credit previously brought into account for tax purposes in respect of the gain.

(3) References in this paragraph to the recognition of a loss reversing a gain recognised in a previous period of account do not include a loss recognised by way of amortisation, or as a result of an impairment review, of an asset that has previously been the subject of a revaluation within the meaning of paragraph 15.