Corporation Tax Act 2009 section 871

Introduction to Chapter

Section 871 sets out when the rules in Chapter 15 apply, which is whenever a company changes its accounting policy between consecutive periods of account.

• The chapter applies where a company changes its accounting policy from one period of account to the next, provided each period's approach complies with the law and practice applicable at the time.
• The first of the two consecutive periods is called the "earlier period" and the following one is called the "later period".
• A typical example of a change covered by this chapter is a switch from UK generally accepted accounting practice to international accounting standards, or vice versa.
• Both accounting approaches must be legitimate under the rules in force for their respective periods — the chapter does not apply where an incorrect approach was used in either period.