1069.This section sets out the circumstances in which section 312 applies. It is based on section 85C(1) and (2) of FA 1996. This and the following section apply where, as a result of GAAP (generally accepted accounting practice), the full amount arising on transactions is not brought into account. This can arise in two circumstances: first where assets and liabilities are “matched” and GAAP permits the whole or part of the income arising on those assets to be “derecognised” and second where there is a capital contribution and the company is not treated as a party to a debtor relationship or as having a recognised accounting liability.
Commentary on Sections Overview Overview Section 311: Amounts not fully recognised for accounting purposes: introduction