Commentary on Sections Overview Chapter 5: Continuity of treatment on transfers within groups Section 628: Transferor using fair value accounting
1718.This section substitutes rules based on fair value accounting for those in section 625, in a case to which that section applies, if the transferor uses fair value accounting in respect of the derivative contract in question. It is based on paragraph 30 of Schedule 26 to FA 2002.
1719.As regards the transferee, this section treats it as having acquired the derivative contract at the fair value of the contract as at the time of the transfer for the purposes of determining the credits and debits brought into account under this Part, regardless of whether it itself uses fair value accounting as respects the contract. This treatment continues to apply for any accounting period in which the transferee is a party to the contract.
1720.As in section 625, any “discount” is added to the amount treated as consideration by the transferor (only).