SCHEDULE 17A

Accounting Standards

Section 76A.

Interpretation

1. In this Schedule “relevant accounting standards” means—

(a) international accounting standards, ^[11]>or^<[11]

(b) as regards the matters covered by those published standards, Irish generally accepted accounting practice which is based on published standards—

(i) which are stated so as to embody, in whole or in part, international accounting standards, and

(ii) the application of which would produce results which are substantially the same as results produced by the application of international accounting ^[12]>standards.^<[12][12]>standards, or^<[12]

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(c) in relation to any accounting period beginning on or after 1 January 2015, Irish generally accepted accounting practice based on published standards to the extent that practice is based on the provisions of those published standards that are stated to embody international accounting standards.

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Transitional Measures (amounts receivable and deductible)

2.

(1) In this paragraph—

“deductible amount”, in relation to a company, means the aggregate of the amounts of—

(a) so much of any amounts receivable by the company which falls to be taken into account as a trading receipt in computing the profits or gains for the purposes of Case I or II of Schedule D of the company for an accounting period computed in accordance with relevant accounting standards as was also taken into account as a trading receipt in computing such profits or gains of the company for any accounting period ending before the first accounting period in respect of which such profits or gains of the company were so computed, and

(b) so much of an expense incurred by the company, being an expense which would have been deductible in computing profits or gains for the purposes of Case I or II of Schedule D of the company if the expense had been incurred in an accounting period for which such profits or gains were computed in accordance with relevant accounting standards, as—

(i) was not deducted in computing the profits or gains for the purposes of Case I or II of Schedule D of the company for an accounting period ending before the first accounting period in respect of which such profits or gains of the company are computed in accordance with relevant accounting standards, and

(ii) is not deductible in computing the profits or gains for the purposes of Case I or II of Schedule D of the company for any accounting period for which such profits or gains of the company are so computed;

“taxable amount”, in relation to a company, means the aggregate of the amounts of—

(a) so much of an amount receivable by the company, being an amount receivable which would have been taken into account as a trading receipt in computing the profits or gains for the purposes of Case I or II of Schedule D of the company if the amount had accrued in an accounting period for which such profits or gains were computed in accordance with relevant accounting standards, as is not so taken into account—

(i) for an accounting period for which such profits or gains of the company are computed in accordance with relevant accounting standards, or

(ii) for an accounting period ending before the first accounting period in respect of which such profits or gains are so computed,

and

(b) so much of an expense incurred by the company which is deductible in computing the profits or gains for the purposes of Case I or II of Schedule D of the company for an accounting period for which such profits or gains of the company are computed in accordance with relevant accounting standards as was deducted in computing such profits or gains of the company for any accounting period ending before the first accounting period of the company in respect of which such profits or gains were so computed.

(2) (a) An amount equal to the excess of the taxable amount in relation to a company over the deductible amount in relation to the company shall, subject to subparagraph (4), be treated as a trading receipt of the company for the first accounting period of the company in respect of which profits or gains for the purposes of Case I or II of Schedule D of the company are computed in accordance with relevant accounting standards.

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(b) Notwithstanding clause (a), an amount which is treated under clause (a) as a trading receipt for an accounting period shall not be taken into account in computing the profits or gains for the purposes of Case I or II of Schedule D of the company for that accounting period but instead, subject to clause (c)—

(i) one-fifth of the amount shall be so taken into account for that accounting period, and

(ii) a further one-fifth shall be so taken into account for each succeeding accounting period until the whole amount has been accounted for.

(c) Where any accounting period referred to in subclause (i) or (ii) of clause (b) is the last accounting period in which a company carried on a trade or profession then such fraction, of the amount referred to in those subclauses, shall be taken into account for that accounting period as is required to ensure that the whole of that amount is accounted for.

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(b) Notwithstanding clause (a), an amount (in this subparagraph referred to as the “relevant amount”) which is treated under clause (a) as a trading receipt for an accounting period (in this clause referred to as the “relevant accounting period”) shall not be taken into account in computing the profits or gains for the purposes of Case I or II of Schedule D of the company for that accounting period but instead, subject to clause (c), a part of the relevant amount shall be so taken into account for each accounting period falling wholly or partly into the period of 5 years beginning at the commencement of the relevant accounting period. The part of the relevant amount to be so taken into account for any such accounting period shall be such amount as bears to the relevant amount the same proportion as the length of the accounting period, or the part of the accounting period falling into the period of 5 years, bears to 5 years.

(c) Where any accounting period referred to in clause (b) is the last accounting period in which a company carried on a trade or profession, then such part of the relevant amount shall be taken into account for that accounting period as is required to ensure that the whole of that amount is accounted for.

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(3) (a) An amount equal to the excess of the deductible amount in relation to a company over the taxable amount in relation to the company shall, subject to subparagraph (4), be treated as a deductible trading expense of the trade carried on by the company for the first accounting period of the company in respect of which profits or gains for the purposes of Case I or II of Schedule D of the company are computed in accordance with relevant accounting standards.

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(b) Notwithstanding clause (a), an amount which is treated under clause (a) as a deductible trading expense for an accounting period shall not be taken into account in computing the profits or gains for the purposes of Case I or II of Schedule D of the company for that accounting period but instead, subject to clause (c)—

(i) one-fifth of the amount shall be so taken into account for that accounting period, and

(ii) a further one-fifth shall be so taken into account for each succeeding accounting period until the whole amount has been accounted for.

(c) Where any accounting period referred to in subclause (i) or (ii) of clause (b) is the last accounting period in which a company carried on a trade or profession then such fraction, of the amount referred to in those subclauses, shall be taken into account for that accounting period as is required to ensure that the whole of that amount is accounted for.

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(b) Notwithstanding clause (a), an amount (in this subparagraph referred to as the “relevant amount”) which is treated under clause (a) as a deductible trading expense for an accounting period (in this clause referred to as the “relevant accounting period”) shall not be taken into account in computing the profits or gains for the purposes of Case I or II of Schedule D of the company for that accounting period but instead, subject to clause (c), a part of the relevant amount shall be so taken into account for each accounting period falling wholly or partly into the period of 5 years beginning at the commencement of the relevant accounting period. The part of the relevant amount to be so taken into account for any such accounting period shall be such amount as bears to the relevant amount the same proportion as the length of the accounting period, or the part of the accounting period falling into the period of 5 years, bears to 5 years.

(c) Where any accounting period referred to in clause (b) is the last accounting period in which a company carried on a trade or profession, then such part of the relevant amount shall be taken into account for that accounting period as is required to ensure that the whole of that amount is accounted for.

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(4) This paragraph does not apply as respects any amount taken into account under ^[4]>paragraph 4^<[4][4]>paragraph 3 or 4^<[4].

Transitional Arrangements (bad debts)

3.

(1) In this paragraph—

“current bad debts provision”, in relation to a period of account of a company, means so much of the aggregate value of debts at the end of the period of account as represents the extent to which they are estimated to be impaired in accordance with relevant accounting standards;

“first relevant period of account”, in relation to a company, means the first period of account in respect of which the company prepares its accounts in accordance with relevant accounting standards;

“opening bad debts provision”, in relation to a company, means so much of the aggregate value of debts at the beginning of the first relevant period of account of the company as represents the extent to which they are estimated to be impaired in accordance with those standards;

“specific bad debts provision”, in relation to a company, means the aggregate of the amounts of doubtful debts which were respectively estimated to be bad at the end of the period of account immediately preceding the first relevant period of account of the company.

(2) This paragraph applies as respects a period of account in respect of which a company prepares its accounts in accordance with relevant accounting standards.

(3) Where, as respects any period of account for which a company prepares its accounts in accordance with relevant accounting standards, the amount of the opening bad debts provision exceeds the higher of—

(a) the current bad debts provision, or

(b) the specific bad debts provision,

the excess, reduced by any amount treated under this section as a trading expense for any earlier period of account or, if there is more than one such amount, by the aggregate of such amounts, shall be treated as a trading expense of the company’s trade for the period of account.

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(4) A debt shall not be taken into account for the purposes of paragraph 4 if it may be taken into account for the purposes of this paragraph.

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Transitional Measures (gains and losses in financial instruments)

4.

(1) In this paragraph—

“changeover day”, in relation to a company, means the last day of the accounting period immediately preceding the first accounting period of the company in respect of which profits or gains for the purposes of Case I or II of Schedule D of the company are computed in accordance with relevant accounting standards which are, or include, relevant accounting standards in relation to profits or gains or losses on financial assets and financial liabilities;

“deductible amount”, in relation to a company, means the aggregate of—

(a) so much of any amount of loss accruing on or before the changeover day on a financial asset or financial liability of the company, being a loss which had not been realised on or before that day and which would have been taken into account in computing profits or gains for the purposes of Case I or II of Schedule D of the company if it had accrued in an accounting period commencing after the changeover day, as, apart from this paragraph, would not be so taken into account for any accounting period of the company, and

(b) so much of any amount of profits or gains, accruing and not realised in a period or periods (in this clause referred to as the “first-mentioned period or periods”) ending on or before the changeover day on a financial asset or financial liability of the company, which falls to be taken into account in computing the profits or gains for the purposes of Case I or II of Schedule D of the company for an accounting period or periods commencing before the changeover day as would, apart from this paragraph, be taken into account twice in computing profits or gains for the purposes of Case I or II of Schedule D of the company, by virtue of a profit, gain or loss, accruing in a period which includes the first-mentioned period or periods, being taken into account in computing profits or gains for the purposes of Case I or II of Schedule D of the company for an accounting period commencing after the changeover day;

“taxable amount”, in relation to a company, means the aggregate of—

(a) so much of any amount of profits or gains accruing on or before the changeover day on a financial asset or financial liability of the company, being profits or gains which had not been realised on or before that day and which would have been taken into account in computing the profits or gains for the purposes of Case I or II of Schedule D of the company if they had accrued in an accounting period commencing after the changeover day, as apart from this paragraph, would not be so taken into account for any accounting period of the company, and

(b) so much of any amount of loss, accruing and not realised in a period or periods (in this clause referred to as the “first-mentioned period or periods”) ending on or before the changeover day on a financial asset or financial liability of the company, which falls to be taken into account in computing the profits or gains for the purposes of Case I or II of Schedule D of the company for an accounting period or periods commencing before the changeover day as would, apart from this paragraph, be taken into account twice in computing profits or gains for the purposes of Case I or II of Schedule D of the company, by virtue of a profit, gain or loss, accruing in a period which includes the first-mentioned period or periods, being taken into account in computing profits or gains for the purposes of Case I or II of Schedule D of the company for an accounting period commencing after the changeover day.

(2) (a) An amount equal to the excess of the taxable amount in relation to a company over the deductible amount in relation to the company shall be treated as a trading receipt of the company for the first accounting period of the company commencing after the changeover day.

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(b) Notwithstanding clause (a), an amount which is treated under clause (a) as a trading receipt for an accounting period shall not be taken into account in computing the profits or gains for the purposes of Case I or II of Schedule D of the company for that accounting period but instead, subject to clause (c)—

(i) one-fifth of the amount shall be so taken into account for that accounting period, and

(ii) a further one-fifth shall be so taken into account for each succeeding accounting period until the whole amount has been accounted for.

(c) Where any accounting period referred to in subclause (i) or (ii) of clause (b) is the last accounting period in which a company carried on a trade or profession then such fraction, of the amount referred to in those subclauses, shall be taken into account for that accounting period as is required to ensure that the whole of that amount is accounted for.

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(b) Notwithstanding clause (a), an amount (in this subparagraph referred to as the “relevant amount”) which is treated under clause (a) as a trading receipt for an accounting period (in this clause referred to as the “relevant accounting period”) shall not be taken into account in computing the profits or gains for the purposes of Case I or II of Schedule D of the company for that accounting period but instead, subject to clause (c), a part of the relevant amount shall be so taken into account for each accounting period falling wholly or partly into the period of 5 years beginning at the commencement of the relevant accounting period. The part of the relevant amount to be so taken into account for any such accounting period shall be such amount as bears to the relevant amount the same proportion as the length of the accounting period, or the part of the accounting period falling into the period of 5 years, bears to 5 years.

(c) Where any accounting period referred to in clause (b) is the last accounting period in which a company carried on a trade or profession, then such part of the relevant amount shall be taken into account for that accounting period as is required to ensure that the whole of that amount is accounted for.

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(3) (a) An amount equal to the excess of the deductible amount in relation to a company over the taxable amount in relation to the company shall be treated as a deductible trading expense of the trade carried on by the company for the first accounting period of the company commencing after the changeover day.

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(b) Notwithstanding clause (a), an amount which is treated under clause (a) as a deductible trading expense for an accounting period shall not be taken into account in computing the profits or gains for the purposes of Case I or II of Schedule D of the company for that accounting period but instead, subject to clause (c)—

(i) one-fifth of the amount shall be so taken into account for that accounting period, and

(ii) a further one-fifth shall be so taken into account in each succeeding accounting period until the whole amount has been accounted for.

(c) Where any accounting period referred to in subclause (i) or (ii) of clause (b) is the last accounting period in which a company carried on a trade or profession then such fraction, of the amount referred to in those subclauses, shall be taken into account for that accounting period as is required to ensure that the whole of that amount is accounted for.

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(b) Notwithstanding clause (a), an amount (in this subparagraph referred to as the “relevant amount”) which is treated under clause (a) as a deductible trading expense for an accounting period (in this clause referred to as the “relevant accounting period”) shall not be taken into account in computing the profits or gains for the purposes of Case I or II of Schedule D of the company for that accounting period, but instead, subject to clause (c), a part of the relevant amount shall be so taken into account for each accounting period falling wholly or partly into the period of 5 years beginning at the commencement of the relevant accounting period. The part of the relevant amount to be so taken into account for any such accounting period shall be such amount as bears to the relevant amount the same proportion as the length of the accounting period, or the part of the accounting period falling into the period of 5 years, bears to 5 years.

(c) Where any accounting period referred to in clause (b) is the last accounting period in which a company carried on a trade or profession, then such part of the relevant amount shall be taken into account for that accounting period as is required to ensure that the whole of that amount is accounted for.

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(4) (a) Subparagraph (5) applies to a loss incurred by a company on the disposal at any relevant time of any financial asset or financial liability where, within a period beginning 4 weeks before and ending 4 weeks after that disposal, the company acquired a financial asset or financial liability of the same class providing substantially the same access to economic benefits and exposure to risk as would have been provided by the reacquisition of the asset or liability disposed of.

(b) In this paragraph “relevant time” means a time after 1 January 2005 which is in a period of 6 months ending on the changeover day.

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(5) A loss to which this subparagraph applies, which would otherwise be taken into account in computing profits or gains or losses of a company for the purposes of Case I or II of Schedule D for an accounting period, shall not be so taken into account but instead—

(a) one-fifth of the loss shall be so taken into account for that accounting period,

(b) a further one-fifth shall be so taken into account for each succeeding accounting period until the whole amount has been accounted for, and

(c) notwithstanding clauses (a) and (b), where any accounting period referred to in those clauses is the last accounting period in which a company carried on a trade or profession then such fraction, of the amount referred to in those clauses, shall be taken into account for that accounting period as is required to ensure that the whole of that amount is accounted for.

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(5) A loss to which this subparagraph applies (in this subparagraph referred to as the “relevant loss”), which would otherwise be taken into account in computing profits or gains or losses of a company for the purposes of Case I or II of Schedule D for an accounting period (in this subparagraph referred to as the “relevant accounting period”), shall not be so taken into account but instead—

(a) (i) a part of the relevant loss shall be so taken into account for each accounting period falling wholly or partly into the period of 5 years beginning at the commencement of the relevant accounting period, and

(ii) the part of the relevant loss to be so taken into account for any such accounting period to which this clause applies shall be such amount as bears to the relevant loss the same proportion as the length of the accounting period, or the part of the accounting period falling into the period of 5 years, bears to 5 years,

and

(b) notwithstanding clause (a), where any accounting period referred to in that clause is the last accounting period in which a company carried on a trade or profession, then such part, of the amount referred to in that clause, shall be taken into account for that accounting period as is required to ensure that the whole of that amount is accounted for.

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(6) As respects the ^[9]>first accounting period^<[9][9]>first, second and third accounting periods^<[9] of a company in respect of which profits or gains for the purposes of Case I or II of Schedule D of the company are computed in accordance with relevant accounting standards, which are, or include, relevant accounting standards in relation to profits or gains or losses on financial assets or liabilities, section 958 shall have effect as if—

(a) in subsection (4D)(b) the following were substituted for “no amount were included in the chargeable person’s profits for the chargeable period in respect of chargeable gains on the disposal by the person of assets in the part of the chargeable period which is after the date by which the first instalment for the chargeable period is payable in accordance with subsection (2A)”:

“no amount were included in the chargeable person’s profits for the chargeable period in respect of—

(i) chargeable gains on the disposal by the person of assets in the part of the chargeable period which is after the date by which, or

(ii) profits or gains or losses accruing, and not realised, in the chargeable period on financial assets or financial liabilities as are attributable to changes in value of those assets or liabilities in the part of the chargeable period which is after the end of the month immediately preceding the month in which,

the first instalment for the chargeable period is payable in accordance with subsection (2A)”,

and

(b) in subsection (4E)(b) the following were substituted for “no amount were included in the chargeable person’s profits for the chargeable period in respect of chargeable gains on the disposal by the person of assets in the part of the chargeable period which is after the date by which preliminary tax for the chargeable period is payable in accordance with subsection (2B)”:

“no amount were included in the chargeable person’s profits for the chargeable period in respect of—

(i) chargeable gains on the disposal by the person of assets in the part of the chargeable period which is after the date by which, or

(ii) profits or gains or losses accruing, and not realised, in the chargeable period on financial assets or financial liabilities as are attributable to changes in value of those assets or liabilities in the part of the chargeable period which is after the end of the month immediately preceding the month in which,

preliminary tax for the chargeable period is payable in accordance with subsection (2B)”.

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