Corporation Tax Act 2009 section 1255

Meaning of some accounting terms

Section 1255 defines key accounting terms — "debited in accounts", "brought into account", "credit" and "debit" — as they are used in the rules on management expenses for companies with investment business.

• Management expenses "debited in accounts" means those expenses recognised as a debit in the profit and loss account, income statement, or any other statement used to calculate the company's profits and losses for accounting purposes
• An amount "brought into account" (for claw-back of relief purposes) has the same meaning — it must appear in the profit and loss account, income statement, or equivalent statement of gains and losses
• A "credit" is an amount that, for accounting purposes, increases or creates a profit, or reduces a loss, for a period of account
• A "debit" is an amount that, for accounting purposes, reduces a profit, or increases or creates a loss, for a period of account