Corporation Tax Act 2009 section 716

"Recognised" amounts and "GAAP-compliant accounts"

Section 716 defines what it means for an amount to be "recognised" for the purposes of the intangible fixed assets rules, and introduces the concept of "GAAP-compliant accounts".

• A "recognised" amount is any amount appearing in the company's profit and loss account, income statement, statement of comprehensive income, statement of changes in equity, or similar financial statements — or any amount that would have appeared had accounts been prepared under generally accepted accounting practice (GAAP).
• Prior period adjustments shown in any of these statements must be brought into account in the period to which the statement relates, rather than the earlier period to which the adjustment refers.
• The prior period adjustment rule does not apply to corrections of fundamental errors, which are excluded from this treatment.
• "GAAP-compliant accounts" simply means accounts drawn up in accordance with generally accepted accounting practice; companies that are members of a group should also consider the additional rules in section 718 regarding consolidated group accounts.