Part 8Intangible fixed assets
Chapter 4Realisation of intangible fixed assets
736Asset shown in balance sheet and not written down for tax purposes
1
This section applies if—
a
there is a realisation of an intangible fixed asset to which section 735 does not apply, and
b
a value is shown for the asset in the company's balance sheet.
2
If the proceeds of realisation exceed the cost of the asset, a credit equal to the excess must be brought into account for tax purposes.
3
If the proceeds of realisation are less than the cost of the asset, a debit equal to the shortfall must be brought into account for tax purposes.
4
If there are no proceeds of realisation, a debit equal to the cost of the asset must be brought into account for tax purposes.
5
In this section “the cost of the asset” means the cost recognised for tax purposes.
6
The cost of the asset recognised for tax purposes is the same as the amount of expenditure on the asset capitalised by the company for accounting purposes.
7
Subsection (6) is subject to any adjustments required by this Part or Schedule 28AA to ICTA (provision not at arm's length)).
8
If this section has applied on a part realisation of an asset and applies again (on the realisation of the unrealised asset) the references in subsections (2) to (4) to the cost of the asset must be read as references to the sum of—
a
the cost recognised for tax purposes in respect of the value of the asset recognised for accounting purposes immediately after the part realisation, and
b
the cost recognised for tax purposes of any subsequent expenditure on the asset that is capitalised for accounting purposes.
9
If there is a further part realisation, subsection (8) applies again.