BIM31015 - Tax and accountancy: meaning of 바카라 사이트˜generally accepted accounting practice바카라 사이트™

S997 Income Tax Act 2007, S1127 Corporation Act 2010

Generally accepted accounting practice (GAAP) means:

  • UK generally accepted accounting practice (UK GAAP); or
  • for companies or other entities which prepare their accounts in accordance with international accounting standards (IAS), generally accepted accounting practice in relation to such accounts.

Individuals, not being 바카라 사이트˜entities바카라 사이트™, may not use IAS. Almost all UK companies have the choice of preparing their statutory (ie Companies Act) accounts either under IAS or using UK GAAP. Charities are an exception - they are not permitted to use IAS. Other entities, such as partnerships or trustees of a unit trust, may also use IAS.

The option for UK companies to use IAS for their statutory accounts was introduced for periods of account beginning on or after 1 January 2005.

An important point to note is that these rules only apply to the computation of profits for tax purposes. So, for example, a non-resident entity trading in the UK would not have to prepare UK GAAP accounts and, if their accounts are not prepared in accordance with IAS, they would have to prepare a computation which complied with UK GAAP for tax purposes.

Further guidance on the tax implications of IAS and UK GAAP, including a list of comparisons between the two sets of standards, can be obtained from the page 바카라 사이트˜International accounting standards - the UK tax implications바카라 사이트™ .

The following guidance explains more about UK GAAP and IAS and their interaction:

BIM31020 Tax and accountancy: meaning of 바카라 사이트˜UK generally accepted accounting principles바카라 사이트™
BIM31025 Tax and accountancy: meaning of 바카라 사이트˜international accounting standards바카라 사이트™
BIM31027 Tax and accountancy: interaction of UK GAAP and IAS