Regulation 3 Liabilities that do not arise from capital expenditureI1

Subject to F1paragraphs (2) and (3) liabilities of a local authority that do not arise from the incurring by the authority of capital expenditure are liabilities specified for the purposes of section 7(3)(c) (Exclusion of certain liabilities from definition of “qualifying liabilities”).

Paragraph (1) does not apply where proper practices in accordance with regulation 25 require the recognition of a F2non-current asset which is not a financial asset.

Paragraph (1) applies to liabilities that are credit arrangements entered into after 31st March 2004.

Paragraph (1) does not apply where liabilities are credit arrangements in accordance with section 48 of the Local Government and Housing Act 1989 entered into before 1st April 2004 which are not funded by capital receipts or credit arrangements under section 50(3) of that Act until such arrangements cease or are varied in any way.