Old rules: loan relationships: authorised accounting methods: accruals basis
Features of an authorised accruals method
This guidance applies to periods of account beginning before 1 January 2005
FA96/S85(3) sets out a number of requirements that an accruals basis must satisfy to be an authorised one. These cover
- allocating payments to the accounting period to which they relate (CFM80160),
- apportioning payments that relate to two or more periods on a just and reasonable basis,
- assuming (subject to authorised arrangements for bad debt) that every amount payable will be paid in full,
- making appropriate adjustments under the authorised arrangements for bad debt,
- ensuring that any amounts released are brought into account by the debtor.
Payments can include finance costs and interest.