Section 732 — Corporation Tax Act 2009: Reversal of previous accounting gain

Reversal of previous accounting gain 732 1 This section applies if—

a in a period of account a loss is recognised in determining a company's profit or loss (“the recognised loss”),

b the loss wholly or partly reverses a gain recognised in a previous period of account (“the reversed gain”),

and c a credit was brought into account for tax purposes under Chapter 2 (credits in respect of intangible fixed assets) in respect of that gain (“the previous credit”).

2 A corresponding debit must be brought into account for tax purposes.

3 The amount of that debit is— RL × PC RG where— RL is the recognised loss, PC is the previous credit, and RG is the reversed gain.

4 References in this section to the recognition of a loss that reverses a gain recognised in a previous period of account do not include a loss recognised—

a by way of amortisation of an asset that has previously been the subject of a revaluation, or b as a result of an impairment review of such an asset.

5 In subsection (4) “ revaluation ” has the same meaning as in section 723 (see subsection (5) of that section).