Section 873 | Effect of application of section 872 in later period and subsequently

(1)A credit or debit that is required to be brought into account under section 872 is treated as arising at the beginning of the later period (“the relevant time”).

(2)If a credit is to be brought into account, the tax written-down value of the asset at the relevant time is the sum of—

(a)the tax written-down value of the asset at the end of the earlier period, and

(b)the credit.

(3)If a debit is to be brought into account, the tax written-down value of the asset at the relevant time is—

(a)the tax written-down value of the asset at the end of the earlier period, less

(b)the debit.

(4)After the relevant time the cost recognised for tax purposes is the sum of—

(a)the tax written-down value given by subsection (2) or (3), and

(b)the cost recognised for tax purposes of any subsequent expenditure on the asset that is capitalised for accounting purposes.

(5)After the relevant time the tax written-down value is determined taking account only of subsequent credits and debits.