The Loan Relationships and Derivative Contracts (Change of Accounting Practice) (Amendment No. 2) Regulations 2015

These Regulations may be cited as the Loan Relationships and Derivative Contracts (Change of Accounting Practice) (Amendment No. 2) Regulations 2015 and come into force on 31st December 2015.

These Regulations have effect in relation to periods of account beginning on or after 1st January 2016.

But regulations 4 and 6 only apply where the later period begins on or after 1st January 2016.

In paragraph (3), “later period” has the meaning given in section 315(2) of CTA 2009.

for paragraph (2) substitute—

“(2)

Subject to paragraphs (2A) and (7A), one tenth of the applicable amount must be brought into account for each year in the period of ten years beginning with the later period.

(2A)

Where the applicable amounts relate to own credit risk which would be recognised in the company’s accounts as an item of other comprehensive income on the application of the relevant recognition and measurement provisions of International Financial Reporting Standard 9 issued by the International Accounting Standards Board on 24th July 2014, a percentage of the applicable amounts must be brought into account for each year in the period of five years beginning with the later period as follows—

1st year	40%
2nd year	25%
3rd year	15%
4th year	10%
5th year	10%

”

in paragraphs (3) and (4) , after “(2)” insert “or (2A)”,

in paragraph (5) for “paragraphs (7A) and (7B)” substitute “paragraph (7A)”,

in paragraph (7A)—

omit paragraph (7B), and

at the end insert—

“(9)

In this regulation—

• “own credit risk” has the meaning it has for accounting purposes;

• “prescribed period” means the period of ten years referred to in paragraph (2) or the period of five years referred to in paragraph (2A).”.

in paragraphs (2) and (10) for “carrying value” substitute “tax-adjusted carrying value”, and

in paragraph (10)—

for “in any accounting period of a company beginning on or after 1st January 2005” substitute “which represent an adjustment arising from a change in accounting policy”,

for sub-paragraph (a) substitute—

“(a)

section 308 of CTA 2009;”, and

for sub-paragraph (c) substitute—

“(c)

section 597 of CTA 2009;”.