The Loan Relationships and Derivative Contracts (Change of Accounting Practice) (Amendment) Regulations, SI 2014/3187, have been laid before the House of Commons. These amending regulations, coming into force on 31 December 2014, preserve the treatment given under current accounting standards for debt modified as part of a corporate rescue. They provide rules on smoothing the transitional tax treatment of corporate loan relationships where a company changes its accounting policy. This forms part of a group of changes to ease the introduction of new UK GAAP from 1 January 2015. The wording of what constitutes financial distress has been amended from the draft published for comment in August 2014. Relief will now be available where there is a material risk that, within 12 months, the company will be unable to settle its debts.
The Loan Relationships and Derivative Contracts (Disregard and Bringing into Account of Profits and Losses) (Amendment) Regulations, SI 2014/3188, have also been laid before the Commons. These amending regulations, coming into force on 31 December 2014, make changes in connection with the elections companies can make under the disregard regulations. Changes include:
replacing the current 'elect-out' with a single election to 'elect-in' to the disregard for fair value movements;
a 6-month period for large companies to make the election (12 months for other companies); the option to amend or revoke an election after three years; and
an anti-avoidance provision on claims to relief for fair value losses.
The changes are intended to ease the introduction of new UK GAAP from 1 January 2015. A draft of the regulations was published for comment during August and September 2014.
The Loan Relationships and Derivative Contracts (Change of Accounting Practice) (Amendment) Regulations, SI 2014/3187, have been laid before the House of Commons. These amending regulations, coming into force on 31 December 2014, preserve the treatment given under current accounting standards for debt modified as part of a corporate rescue. They provide rules on smoothing the transitional tax treatment of corporate loan relationships where a company changes its accounting policy. This forms part of a group of changes to ease the introduction of new UK GAAP from 1 January 2015. The wording of what constitutes financial distress has been amended from the draft published for comment in August 2014. Relief will now be available where there is a material risk that, within 12 months, the company will be unable to settle its debts.
The Loan Relationships and Derivative Contracts (Disregard and Bringing into Account of Profits and Losses) (Amendment) Regulations, SI 2014/3188, have also been laid before the Commons. These amending regulations, coming into force on 31 December 2014, make changes in connection with the elections companies can make under the disregard regulations. Changes include:
replacing the current 'elect-out' with a single election to 'elect-in' to the disregard for fair value movements;
a 6-month period for large companies to make the election (12 months for other companies); the option to amend or revoke an election after three years; and
an anti-avoidance provision on claims to relief for fair value losses.
The changes are intended to ease the introduction of new UK GAAP from 1 January 2015. A draft of the regulations was published for comment during August and September 2014.
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