Corporation Tax Act 2009 section 1217QB

Calculation of profits or losses of separate orchestral trade

Section 1217QB sets out the method for calculating the profits and losses of a separate orchestral trade, using a cost-based approach that recognises income in proportion to expenditure incurred.

• In the first period of account, production costs incurred to date are recorded as a debit and the proportionate share of estimated total income treated as earned is recorded as a credit
• In subsequent periods, only the incremental movement in costs and in the proportion of estimated income earned (compared with the previous period) is brought into account
• The proportion of estimated total income treated as earned at the end of any period is calculated as: (costs incurred to date ÷ estimated total cost) × estimated total income
• This approach matches income recognition to the stage of completion of the concert or concert series, measured by the ratio of actual costs to expected total costs