Corporation Tax Act 2009

732 Reversal of previous accounting gain

(1) This section applies if—

(a) in a period of account a loss is recognised in determining a company’s profit or loss (“the recognised loss”),

(b) the loss wholly or partly reverses a gain recognised in a previous period of account (“the reversed gain”), and

(c) a credit was brought into account for tax purposes under Chapter 2 (credits in respect of intangible fixed assets) in respect of that gain (“the previous credit”).

(2) A corresponding debit must be brought into account for tax purposes.

(3) The amount of that debit is—

where—

• RL is the recognised loss,

• PC is the previous credit, and

• RG is the reversed gain.

(4) References in this section to the recognition of a loss that reverses a gain recognised in a previous period of account do not include a loss recognised—

(a) by way of amortisation of an asset that has previously been the subject of a revaluation, or

(b) as a result of an impairment review of such an asset.

(5) In subsection (4) “revaluation” has the same meaning as in section 723 (see subsection (5) of that section).