Adopting new UK GAAP and the disregard regulations

The Loan Relationships and Derivative Contracts (Disregard and Bringing into Account of Profits and Losses) Regulations SI 2004/3256 (referred to throughout this article as ‘DR’) originated in response to increased use of fair value accounting – particularly for derivatives – with the advent in 2005 of IFRS and IFRS-aligned methods of accounting. In the event most UK companies will only ultimately migrate to an IFRS-aligned method of accounting with the mandatory adoption of new UK GAAP (principally FRS 101 and FRS 102 – with IFRS ‘the new accounting’) for periods of account beginning on or after 1 January this year. The corporation tax regimes for loan relationships and...