6—(1) This paragraph applies where for any accounting
period section 87 of this Act requires an authorised accruals basis
of accounting to be used as respects a creditor relationship of a
company.
(2) The credits and debits which for that period are to be
brought into account for the purposes of this Chapter in accordance
with that accounting method shall be computed subject to sub-
paragraphs (3) to (6) and paragraph 6A and 6B below.
(3) The assumption that every amount payable under the
relationship will be paid in full shall be applied as if no
departure from that assumption were authorised by virtue of
paragraph 5(1) above except where it is allowed by sub-paragraph
(4) or paragraph 6A or 6B below.
(4) A departure from that assumption shall be allowed in
relation to a liability to pay any amount to the company ("the
creditor company") under the creditor relationship where—
(a) in consideration of, or of any entitlement to, any shares forming part of the ordinary share capital of the company on whom the liability would otherwise have fallen, the creditor company treats the liability as discharged; and
(b) the condition specified in sub-paragraph (5) below is satisfied.
(5) That condition is that there would be no connection between
the two companies for the accounting period in which that
consideration is given if the question whether there is such a
connection for that period fell to be determined, in accordance
with section 87 of this Act, by reference only to times before the
creditor company acquired possession of, or any entitlement to, the
shares in question.
(6) Where the company ceases in the accounting period in
question to be a party to the relationship—
(a) the debits brought into account for that period in respect of that relationship shall not (subject to sub-paragraph (7) below) be more than they would have been had the company not ceased to be a party to the relationship; and
(b) the credits brought into account for that period in respect of the relationship shall not (subject to that sub-paragraph) be less than they would have been in those circumstances.
(7) In determining for the purposes of sub-paragraph (6) above
the debits and credits that would have been brought into account if
a company had not ceased to be a party to a loan relationship, no
account shall be taken of any amounts that would have accrued at
times after it ceased to be a party to the relationship.
(8) Nothing in this paragraph affects the debits or credits
to be brought into account for the purposes of this Chapter in
respect of exchange gains or losses arising from a debt.
