Change in equity share: activation of allowanceU.K.
342Introduction to sections 343 and 344U.K.
(1)Sections 343 and 344 apply to a company in respect of a new oil field and an accounting period if the following conditions are met.
(2)Condition A is that the company is a licensee in the field for the whole, or for part, of the accounting period.
(3)Condition B is that the company's share of the equity in the field is different at different times during the accounting period.
(4)Condition C is that the company holds an unactivated amount of field allowance for the field at any time during the accounting period.
(5)Condition D is that the company has relevant income from the field in the accounting period.
(6)In a case where a company has three or more different shares of the equity in a new oil field during a particular day, sections 343 and 344 (in particular provisions relating to the beginning or end of a day) have effect subject to the necessary modifications.
343Reference periodsU.K.
(1)For the purposes of section 344, the accounting period, or (if the company is not a licensee for the whole of the accounting period) the part or parts of the accounting period for which the company is a licensee, is to be divided into reference periods.
(2)A reference period is a period of consecutive days that meets the following conditions.
(3)Condition A is that, at the beginning of each day in the period, the company is a licensee in the new oil field.
(4)Condition B is that, at the beginning of each day in the period, the company's share of the equity in the field is the same.
(5)Condition C is that, at the beginning of the first day of the period, the company holds an unactivated amount of field allowance for the field.
(6)Condition D is that each day in the period falls within the accounting period.
344Activation of field allowanceU.K.
(1)An amount of the company's field allowance for the new oil field is to be activated in respect of each reference period.
(2)The amount of the field allowance to be activated is the smallest of the following amounts—
(a)the relevant activation limit,
(b)the company's relevant income from the field in the reference period, and
(c)the unactivated amount of the field allowance which the company holds at the beginning of the reference period.
(3)The relevant activation limit is—
where—
T is the amount of the total field allowance for the field (see section 356),
E is the company's share of the equity in the field during the reference period, and
R is the number of days in the reference period.
(4)The company's relevant income from the field in the reference period is—
where—
I is the company's relevant income from the field in the whole of the accounting period,
R is the number of days in the reference period, and
L is the number of days in the accounting period for which the company is a licensee in the new oil field.