IFRS and Derivatives Taxation

The United Kingdom operates a broadly accounts-based regime for the taxation of derivative contracts. Significant adjustments to figures shown in the profit and loss account may be required, however, and in some cases the legislation deliberately preserves the position under UK generally accepted accounting practice (UK GAAP) as it stood prior to 1 January 2005, even for companies that account under IFRS. The proposed introduction of IFRS 9 means that further development of the UK tax code is likely.