Corporation Tax Act 2009

702 “Carrying value”

(1) For the purposes of this Part, the “carrying value” of a contract includes amounts recognised for accounting purposes in relation to the contract in respect of—

(a) accrued amounts,

(b) amounts paid or received in advance, or

(c) impairment losses (including provisions for bad or doubtful debts).

(2) In determining the profits and losses to be recognised in determining the carrying value of the contract for the purposes of this Part, the provisions in subsection (3) apply as they apply for the purposes of determining the credits and debits to be brought into account in accordance with this Part.

(3) Those provisions are—

(a) section 584 (hybrid derivatives with embedded derivatives),

(b) section 585 (loan relationships with embedded derivatives),

(c) section 586 (other contracts with embedded derivatives),

(d) section 625(3) to (5) (transactions within groups),

(e) sections 675 and 676 (European cross-border transfers of business), and

(f) sections 684 and 685 (European cross-border mergers).

(4) In this section “impairment loss” means a debit in respect of the impairment of a financial asset, and “impairment” includes uncollectability.