This might be cheeky, what do you think?

I'm of the awkward generation who studied under IFRS but trades within the UK GAAP regime and I am unsure if I may be confusing the two here. I have checked the FRSSE  (briefly) re the below scenario to no avail.

I have a client purchased a building with some rather nice credit terms; £250k in £500/wk instalments with only £35k down. Repayment is 8.26923077 years.

Of course, to recognise the building and corresponding loan amount and subsequent payments would be straightforward enough. But we're accountants; that's not good enough!

My plan/ploy is the time value of money over that 8 year period.

My question is:

If I effectively "Fair Value" that liability, assuming 3.5% inflation pa for example (which I calculate as £161,768.24 starting point) and subsequently recognise the unwinding of the liability as interest income... Is this then a legitimate deductible finance expense under any head of tax?

If you need reference material see p. 161 Appendix 3 of the FRSSE which details the above scenario as applied to a provision.

Any input whatsoever would be gratefully received.

Chris