Companies (Amendment) Act, 1986

Amendment of Act of 1983.

20.—The Act of 1983 is hereby amended by the insertion of the following section after section 45:

“Development costs shown as an asset of a company to be set off against company's distributable profits.

45A.—(1) Subject to the following provisions of this section, where development costs are shown as an asset in a company's accounts, any amount shown in respect of those costs shall be treated—

(a) for the purposes of section 45, as a realised loss, and

(b) for the purposes of section 47, as a realised revenue loss.

(2) Subsection (1) shall not apply to any part of the amount aforesaid representing an unrealised profit made on revaluation of those costs.

(3) Subsection (1) shall not apply if—

(a) there are special circumstances justifying the directors of the company concerned in deciding that the amount mentioned in respect thereof in the company's accounts shall not be treated as required by that subsection, and

(b) the note to the accounts required by paragraph 8 (2) of the Schedule to the Companies (Amendment) Act, 1986, states that that amount is not to be so treated and explains the circumstances relied upon to justify the decision of the directors to that effect.”.