Commentary on Sections Overview Chapter 3: Debits in respect of intangible fixed assets Section 732: Reversal of previous accounting gain
2007.This section gives relief if a previous, taxed, accounting gain is reversed. It is based on paragraph 12 of Schedule 29 to FA 2002.
2008.The debit will usually be the same as the accounting loss. If, however, the credit brought into account for the earlier period was different from the accounting gain, the formula in subsection (3) ensures that the debit to be recognised is the accounting loss adjusted in the ratio which the earlier credit bears to the earlier accounting gain.
2009.There is a parallel, converse rule in section 725.