Corporation Tax Act 2009 section 1218ZBA

Calculation of profits or losses of separate exhibition trade

Section 1218ZBA sets out how the profits and losses of the separate exhibition trade are calculated for the first period of account and for any subsequent periods, using a cost-based method to recognise income progressively.

• In the first period, cumulative production costs are debited and a proportion of estimated total income (based on costs incurred relative to total expected costs) is credited
• In later periods, only the incremental movement in costs (debit) and in the proportion of estimated income earned (credit) are brought into account
• The proportion of estimated total income treated as earned at the end of any period is calculated as (C / T) × I, where C is costs to date, T is estimated total production cost, and I is estimated total income
• This approach matches income recognition to the stage of completion of the exhibition production, measured by costs incurred as a fraction of total expected costs