Section 181 | Giving effect to positive and negative adjustments

(1)An amount by way of adjustment must be calculated in accordance with section 182.

(2)If the amount produced by the calculation is positive—

(a)the amount is brought into account as a receipt in calculating the profits of the trade, and

(b)the receipt is treated as arising on the first day of the first period of account for which the new basis is adopted.

(3)If the amount produced by the calculation is negative—

(a)a deduction is allowed for the amount as an expense of the trade in calculating the profits of the trade, and

(b)the expense is treated as arising on the first day of the first period of account for which the new basis is adopted.

(4)This section is subject to—

(a)section 183 (no adjustment for certain expenses previously brought into account),

(b)section 184 (cases where adjustment not required until assets realised or written off), and

(c)section 185 (change from realisation basis to mark to market).