Summary of Statement No. 31

Accounting for Tax Benefits Related to U.K. Tax Legislation Concerning Stock Relief (Issued 9/79)


This Statement specifies how an enterprise subject to United States generally accepted accounting principles should account for income taxes relating to recent changes in the United Kingdom tax law concerning "stock relief," which permits an income tax deduction for increases in inventory. The changes have modified the provisions for recapture of the tax benefit of that deduction. The Statement requires that certain previously deferred tax benefits related to "stock relief" be recognized as of July 26, 1979 when the legislation was enacted. Other tax benefits related to "stock relief" should be deferred unless it is probable that those tax benefits will not be recaptured.