Corporation Tax Act 2009 section 1217IA

Calculation of profits or losses of separate theatrical trade

Section 1217IA sets out how the profits and losses of the separate theatrical trade are calculated for the first period of account and any subsequent periods.

• In the first period, cumulative production costs are debited and a proportion of estimated total income is credited
• In subsequent periods, only the incremental movement in costs (debit) and income proportion (credit) since the previous period is brought into account
• The proportion of income treated as earned is calculated as: (costs to date ÷ estimated total cost) × estimated total income
• This approach matches income recognition to the stage of completion of the production, measured by reference to costs incurred