»Ê¹ÚÌåÓýapp

CTA10/S928 deems the accountancy rental earnings to accrue evenly over that part of the period of account in question during which the asset is leased. »Ê¹ÚÌåÓýapp purpose of this rule is twofold:

• First, it deals with cases where the chargeable period (accounting period or year of assessment) is not the same as the period of account.
• Secondly, it ensured a sensible result where an asset was leased part way through the (actual) period of account which straddled 26 November 1996.

Example: a company draws up accounts for the 18 months to 30 June 1999 (comprising for corporation tax a twelve month accounting period to 30 December 1998 and a six month accounting period to 30 June 1999) and begins to finance lease an asset on 1 October 1998. »Ê¹ÚÌåÓýapp accounts for the 18 month period drawn up under show gross earnings (if SSAP21) 0r ‘finance incomeâ€� (if FRS101, FRS102 or IFRS)(that is ‘accountancy rental earningsâ€�) from the lease of £300,000. Section 928(3) provides that the £300,000 accrues evenly over the nine months to 30 June 1999. Thus £100,000 (3/9 x £300,000) is allocated to the accounting period ending 30 December 1998 and £200,000 (6/9 x £300,000) to the accounting period ending 30 June 1999.