Taxation (International and Other Provisions) Act 2010 section 426

Changes in accounting policy

Section 426 explains how changes in accounting policy are handled when a worldwide group has made an interest allowance (alternative calculation) election for a period of account.

• When a group has an interest allowance (alternative calculation) election in effect, the rules in this chapter are modified by this section for the relevant period of account.
• The group's financial statements must be adjusted as if the group were a single UK corporation tax-paying company, holding the same assets, owing the same liabilities, and carrying on the same trades and activities shown in those statements.
• The adjustments follow the existing corporation tax rules for changes of accounting policy — covering trading profits, property profits, loan relationships, derivative contracts, intangible fixed assets, and related transitional provisions.
• These change of accounting policy provisions apply only where there is an actual change of accounting policy, any relevant elections are deemed to have been made, and any other necessary modifications are made for the purposes of this section.