Budget 2010 – Changes in accounting standards
The Chancellor has announced that the corporation tax rules on loan relationships and derivative contracts are to be changed in Finance Bill 2010. This change is a necessary response to changes in accounting standards that the International Accounting Standards Board (IASB) are currently making as part of its project to develop new financial reporting standards for financial instruments.
The corporation tax rule changes will allow regulations to be made to amend the loan relationships and derivative contracts legislation where necessary. This will become more relevant as the IASB launches new financial reporting standards over the coming years.
The new legislation will take effect from the date Finance Act 2010 receives Royal Assent although where necessary the regulations may apply retrospectively.