HL Deb 27 October 1981 vol 424 cc1049-50

196 Schedule 1, page 115, line 27, at end insert—

("Purchase price

87A. References in this Schedule (however expressed) to the purchase price of any asset of a company or of any raw materials or consumables used in the production of any such asset shall be read as including references to any consideration (whether in cash or otherwise) given by the company in respect of that asset or in respect of those materials or consumables (as the case may require).

Realised profits

87B. Without prejudice to—

  1. (a) the construction of any other expression (where appropriate) by reference to accepted accounting principles or practice; or
  2. (b) any specific provision for the treatment of profits of any description as realised;
it is hereby declared for the avoidance of doubt that references in this Schedule to realised profits, in relation to a company's accounts, are references to such profits of the company as fall to be treated as realised profits for the purposes of those accounts in accordance with principles generally accepted with respect to the determination for accounting purposes of realised profits at the time when those accounts are prepared.").

Lord Lyell

My Lords, the first paragraph in this amendment results from an undertaking given by the Government in this House to, so far as I recall, the noble Lord, Lord Bruce of Donington, that they would deal with the problem that the words "purchase price or production cost", as used in Schedule 1, are not wholly appropriate for the amount to be included in the accounts in respect of certain assets such as debts by referring to any consideration given in respect of the asset. We reflected further on this and had further discussions with the accountancy bodies and the Law Society. We hope the amendment makes it quite clear that the term "realized" is to be construed in an accounting rather than a tax context. I beg to move.

Moved, That this House doth agree with the Commons in the said amendment.—(Lord Lyell.)

On Question, Motion agreed to.