Generally accepted accounting practice

(1) In the Tax Acts "generally accepted accounting practice" means -

(a) in relation to the affairs of a company or other entity that prepares accounts in accordance with international accounting standards ("IAS accounts"), generally accepted accounting practice with respect to such accounts;
(b) in any other case, UK generally accepted accounting practice.

(2) In the Tax Acts "international accounting standards" has the same meaning as in Regulation (EC) No 1606/2002 of the European Parliament and the Council of 19 July 2002 on the application of international accounting standards.

(3) Where the European Commission has in accordance with that Regulation adopted an international accounting standard with modifications, then as regards matters covered by that standard -

(a) generally accepted accounting practice with respect to IAS accounts shall be regarded as permitting the use of the standard either with or without the modifications, and
(b) accounts prepared on either basis shall be regarded for the purposes of the Tax Acts as prepared in accordance with international accounting standards.

(4) In the Tax Acts "UK generally accepted accounting practice" -

(a) means generally accepted accounting practice with respect to accounts of UK companies (other than IAS accounts) that are intended to give a true and fair view, and
(b) has the same meaning in relation to -

(i) individuals,
(ii) entities other than companies, and
(iii) companies that are not UK companies,

as it has in relation to UK companies.

In this subsection "UK companies" means companies incorporated or formed under the law of a part of the United Kingdom.

(5) In section 832(1) of the Taxes Act 1988 (interpretation of the Tax Acts) -

(a) in the definition of "generally accepted accounting practice" for "has the meaning given by section 836A" substitute "has the meaning given by section 50(1) of the Finance Act 2004";
(b) at the appropriate place insert -

"international accounting standards" has the meaning given by section 50(2) of the Finance Act 2004;"; and
"UK generally accepted accounting practice" has the meaning given by section 50(4) of the Finance Act 2004;".

(6) This section has effect in relation to -

(a) periods of account beginning on or after 1st January 2005.