770. Treatment of development costs

(1) Where development costs are shown or included as an asset in a company's accounts, any amount shown or included in respect of those costs is treated for the purposes of section 761 (distributions to be made only out of profits available for the purpose) as a realised loss.

This is subject to the following exceptions.
(2) Subsection (1) does not apply to any part of that amount representing an unrealised profit made on revaluation of those costs.
(3) Subsection (1) does not apply if—
(a) there are special circumstances in the company's case justifying the directors in deciding that the amount there mentioned is not to be treated as required by subsection (1),
(b) it is stated in any note to the accounts, that the amount is not to be so treated, and
(c) the note explains the circumstances relied upon to justify the decision of the directors to that effect.