In some circumstances adjustments were made to the value of
stock shown in the accounts for tax computation purposes. When the
tax adjustments cease the value of stock shown in the accounts is
unchanged, but the computation of taxable profits is affected.
Without special legislative enactment the amount of the difference
between the tax adjusted closing stock of the period before the
change and the accounts value opening stock of the new period would
be brought into account as a positive or negative adjustment in the
year of change. This special provision allows the adjustment to be
brought into account only when the stock is sold, otherwise
realised or written off.
This provision also applies when the adjustment is in respect
of any amount brought into account in respect of depreciation.
