Explanatory note

These Regulations amend the Loan Relationships and Derivative Contracts (Change of Accounting Practice) Regulations 2004 (S.I. 2004/3271, as amended by S.I. 2005/3383 and 2006/3238: “the Principal Regulations”) which make provision for certain debits and credits not to be brought into account in the first accounting period beginning on or after 1st January 2005 but to be brought into account over a ten year period, in the first accounting period beginning on or after 1st January 2006, or not to be brought into account for any period.

Regulation 1 provides for citation and commencement.

Regulation 2 introduces the amendments to the Principal Regulations.

Regulation 3 amends regulation 3C (prescribed debits and credits not brought into account). The amendment to paragraph (2)(e) extends the specified debits and credits which are not brought into account to certain debits and credits in relation to certain interest rate, currency, commodity or debt contracts where an election has been made under regulation 6(3A) or (5B) of the Loan Relationships and Derivative Contracts (Disregard and Bringing into Account of Profits and Losses) Regulations 2004 (S.I. 2004/3256, amended by S.I. 2005/2012, 2005/3374, 2006/843, 2006/936 and 2006/3236). The amendment to paragraph (2)(f) corrects a cross-reference.

Regulation 4 amends regulation 4 (prescribed debits and credits) to extend the prescribed credits to be brought into account in accordance with regulation 3 of the Principal Regulations.

A full regulatory impact assessment has not been produced for this instrument as no impact on the private or voluntary sectors is foreseen.