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This example shows how Part 15A Corporation Tax Act 2009 operates to arrive at the profits/losses of a Television Production Company (TPC) producing a programme whose costs increase during production, with the final expenditure exceeding the original estimate.

A TPC is commissioned by a broadcaster to make a programme for an agreed budget of £1.52m and agrees to sell all the rights in the programme to the broadcaster for £1.55³¾. At the end of the first accounting period the TPC has spent £1³¾ and still expects to complete the programme for £1.52m. In the second accounting period, the company spends a further £530k. It goes £10,000 over budget. »Ê¹ÚÌåÓýapp programme is not eligible for TTR.

In the examples, none of the costs are disallowed under the Taxes Acts.

»Ê¹ÚÌåÓýapp profits in each Accounting Period are calculated as follows.

Period 1

-	Amount	Notes
Expenditure incurred by end of period	£1³¾	Out of total expected costs of £1.52m
Income treated as earned by end of period	£1.02³¾	Expected total income of £1.55³¾. »Ê¹ÚÌåÓýapp extent to which this is allocated to Period 1 mirrors the extent to which total expected costs fall within Period 1.\n£1.02 = £1.55³¾ x £1³¾/£1.52m
Profit	£20°ì	-

Period 2

-	Amount	Difference	Notes
Expenditure incurred by end of period	£1.53³¾	-	-
Increase in expenditure incurred over previous period	-	£0.53³¾	£1.53³¾ less £1³¾
Income treated as earned by end of period	£1.55³¾	-	-
Increase in income treated as earned over previous period	-	£0.53³¾	£1.55 less £1.02³¾
Profit	-	£²Ô¾±±ô	-