SolvedMTT15931 | Scope: Safe harbours: Transitional safe harbour: Purchase price accounting adjustments
From HM Revenue & Customs · Multinational Top-up Tax and Domestic Top-up Tax
Where the financial statements used to prepare the country-by-country report reflect purchase price accounting adjustments, a special rule applies.
The consistent reporting condition must be satisfied in order for the statements to be qualified financial statements.
Where that condition is met, the goodwill adjustment must be made.
This is set out in paragraph 4A of Schedule 16 to Finance (No.2) Act 2023.
Consistent reporting condition
The relevant statements cannot be qualified financial statements if:
a CbC Report has been submitted by the group for a period beginning on or after 1 January 2023 and ending before the accounting period for which the election is being made, and
the financial accounts used to prepare that CbC report did not reflect purchase price accounting adjustments.
An exception applies if the group was required by law to reflect purchase price accounting adjustments in its financial statements.
Goodwill adjustment
An adjustment will be required where:
an impairment of goodwill is reflected in the profit (loss) before income tax of a territory,
that goodwill is in relation to a transaction entered into on or after 1 December 2021.
The profit (loss) before income taxis to be adjusted so that it does not reflect the impairment:
Introduction by Finance Act 2025
This provision was introduced into F(No.2)A23 by FA25. This guidance page is not applicable for period beginning before 31 December 2024 unless the retrospection election is made (see MTT09490).