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HMRC internal manual

Corporate Intangibles Research and Development Manual

Core computational rules: accounting: period for which entries taken into account for tax: practical effect

Sums credited to or charged against profits

Amounts shown in the accounts in respect of intangible assets are taken into account for corporation tax essentially for the period of account in which those amounts increase or reduce a company’s accumulated profits or losses in accounts that conform with GAAP (see CIRD30000 onwards).

Normally this will be when those amounts are recognised in a company’s profit and loss account. But sums taken to some other part of a company’s statement of recognised gains and losses, or to its statement of changes in equity, or to any other statement of items brought into account in computing profits and losses for the period, should also be recognised, subject to any specific rules excluding such sums (see for example CIRD13050 on valuation surpluses).

The statement of recognised gains and losses, or statement of changes in equity, should summarise all accounting entries that result in changes to a company’s reserves.

See CIRD12230 for the statutory basis for this approach.