Income Tax Act 2007 section 997

Meaning of "generally accepted accounting practice" and related expressions

Section 997 defines the terms "generally accepted accounting practice", "UK generally accepted accounting practice", "for accounting purposes", and "international accounting standards" as used throughout the Income Tax Acts, and clarifies how these definitions apply to different types of entities and accounts.

• For income tax purposes, "generally accepted accounting practice" normally means UK GAAP — the accounting standards applicable to UK company accounts (excluding IAS accounts) that are intended to give a true and fair view — and this same meaning applies equally to individuals, non-corporate entities, and non-UK companies.
• Where a company or other entity prepares IAS accounts (that is, accounts prepared under international accounting standards), "generally accepted accounting practice" instead means the accounting practice applicable to those IAS accounts.
• "For accounting purposes" means for the purposes of accounts drawn up in accordance with whichever version of generally accepted accounting practice applies to the entity in question — UK GAAP or IAS, as the case may be.
• "International accounting standards" carries the same meaning as it does in the Corporation Tax Acts, as set out in section 1127 of CTA 2010, and "UK companies" means companies incorporated or formed under the law of any part of the United Kingdom.