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HMRC internal manual

Corporate Finance Manual

Derivative contracts: bringing amounts into account: layout of guidance

Computational rules - where to find guidance

This section of the guidance deals with the basic rules about how profits and losses on derivative contracts (including foreign exchange gains and losses) are computed and brought into account.

This guidance does not cover the computational rules that applied in periods of account beginning before 1 January 2005 - see CFM84000 if you are looking at an earlier period.

The next section (CFM52000 onwards) covers exceptions to the basic rule:

  • situations in which it is mandatory to use fair value accounting (CFM52020),
  • amounts released under a statutory insolvency arrangement (CFM52060),
  • credits and debits that are capitalised in connection with fixed capital assets or projects (CFM52040),
  • amounts that are recognised in equity or shareholders’ funds (CFM52050), and
  • changes of accounting practice (CFM52030).

Chapters 3 and 4 of CTA09/Part 7 contain a number of other special computational rules. Guidance on the provisions concerned with certain embedded derivatives is at CFM52500 onwards, and derivatives held by partnerships are covered at CFM52700 onwards.