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Change of accounting policy

For accounting periods beginning on or after 1 January 2016, the loan relationships legislation contains provision to cover cases both where there is a change to the accounting treatment of a loan relationship or to the basis on which profits or losses arising on a loan relationship are recognised (eg where a company is accounting for a creditor loan relationship using a fair value basis and the loan relationship becomes a connected companies relationship so that the company is required to determine the profits or losses arising on the loan relationship using an amortised cost basis of accounting). In both such cases an adjustment is made equal to the difference between the former carrying value of the loan relationship and its carrying value following the change. Where the adjustment arises as a result of a change to the accounting treatment of the loan relationship