CFM52050 - Derivative contracts: the matters and computational rules: credits and debits in equity

CTA09/S605 (as it stood before repeal by F(2)A15)

This guidance is applicable for company periods of account beginning before 1 January 2016.

F(2)A15 made a significant change in this area. For more recent periods, refer to CFM51036.

Amounts recognised in equity

Before it was repealed by F(2)A15, CTA09/S605 contained a provision equivalent to the loan relationships rule at repealed CTA09/S321 (see CFM33170). Where a credit or debit on a derivative contract is not recognised in

  • the company바카라 사이트™s income statement, profit and loss account or statement of comprehensive income; or
  • its statement of total recognised gains and losses (STRGL), statement of changes in equity (SOCIE) or statement of income and retained earnings; or
  • any similar statement of the company바카라 사이트™s profits or losses,
  • but is instead recognised in equity or shareholders바카라 사이트™ funds, the credit or debit is nevertheless brought into account.

This does not over-ride the general rule in CTA09/S595(3) that the credits and debits to be brought into account are those which, taken together, fairly represent the company바카라 사이트™s profit or loss on the derivative contract. In practice, it will be rare for a credit or debit that does form part of such a profit or loss to appear in equity or shareholders바카라 사이트™ funds, rather than in one of the statements listed in CTA09/S597(1).