2221.This Chapter rewrites the rules in Part 13A of Schedule 29 to FA 2002. Part 13A gives rules dealing with a company’s change of accounting policy where it affects assets within the intangible fixed assets regime.
2222.Part 13A of Schedule 29 to FA 2002 applies, in particular, when a company changes between UK generally accepted accounting practice and International Accounting Standards. It ensures that any change in accounting value of the assets resulting from the change of accounting policy will be brought into account for tax purposes.
2223.This section explains when the rules in this Chapter apply. It is based on paragraph 116A of Schedule 29 to FA 2002.
2224.This section provides for an adjustment when the value of an intangible fixed asset changes as a result of a change of accounting policy. It is based on paragraph 116B of Schedule 29 to FA 2002.
2225.This section provides for the change in value to translate into a corresponding credit or debit.
2226.This section sets out the effects of an adjustment under the previous section. It is based on paragraph 116B of Schedule 29 to FA 2002.
2227.This section provides for an adjustment when a change of accounting policy results in one intangible fixed asset being treated as two or more assets and gives the calculation rules. It is based on paragraph 116C of Schedule 29 to FA 2002.
2228.This section sets out the effects of an adjustment under the previous section. It is based on paragraph 116C of Schedule 29 to FA 2002.
2229.This section ensures the calculation rules work properly when a change of accounting policy results in an intangible fixed asset that was subject to a fixed-rate writing down election under section 730 being treated as two or more assets. It is based on paragraph 116D of Schedule 29 to FA 2002.
2230.It gives rules:
to apportion the former tax written-down value of the original intangible fixed asset to each disaggregated asset on the basis of the ratio of their new accounting values; and
to determine how written-down value and cost recognised for tax purposes will be identified subsequently.
2231.The election under section 730 in respect of the original intangible fixed asset applies to that asset for the period prior to the change and to each of the disaggregated assets subsequently.
2232.This section allows a fixed rate writing down election under section 730 to be made in respect of disaggregated assets and gives calculation rules to deal with the effects. It is based on paragraph 116E of Schedule 29 to FA 2002.
2233.This section prevents double counting and gives priority to other rules in this Part where double counting might otherwise arise. It is based on paragraph 116G of Schedule 29 to FA 2002.
2234.This section gives rules on subsequent accounting adjustments in respect of intangible fixed assets which have already been subject to the provisions of this Chapter on a change of accounting policy. It is based on paragraph 116H of Schedule 29 to FA 2002.