Document ID: chunk:federal_register_of_legislation:C2025C00029:section:12:p4
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 12 (pt 4/43)
Character Range: 3955042–3957961

Assessment Act 1936 (which deals with offshore banking units);
 (ii) Part IIIB of that Act (which deals with Australian branches of foreign banks etc.); and
 (b) paragraphs (1)(b) and (c) would be satisfied in relation to the financial arrangement if the arrangement had been between 2 separate entities;
paragraphs (1)(b) and (c) are taken to be satisfied in relation to the arrangement.
 (3) A *financial arrangement that is a *derivative financial arrangement, or is not a derivative financial arrangement but is a *foreign currency hedge, is a hedging financial arrangement if:
 (a) you create, acquire or apply the arrangement for the purpose of hedging a risk or risks in relation to something; and
 (b) one or more of subsections (4), (5), (6) or (7) is satisfied; and
 (c) the requirements of paragraphs (1)(b) or (c) are not able to be satisfied:
 (i) because of the requirements of the principles or standards referred to in paragraph 230‑315(2)(a); and
 (ii) not because of any act or omission on your part to deliberately fail to satisfy those requirements; and
 (d) in a case in which none of subsections (5), (6) and (7) are satisfied—you satisfy the additional recording requirements of subsection 230‑355(5); and
 (e) in any case—you satisfy the requirements (if any) prescribed by the regulations for the purposes of this paragraph.
 (3A) Disregard paragraph (3)(d) if subsection (4) is satisfied and:
 (a) a *hedging financial arrangement election applies to the *financial arrangement (because you previously satisfied the additional recording requirements mentioned in that paragraph at a time when the election applied); or
 (b) all of the following subparagraphs apply:
 (i) a hedging financial arrangement election would apply to the financial arrangement if you satisfied the additional recording requirements mentioned in paragraph (3)(d);
 (ii) the election and subsection (3) apply to another financial arrangement;
 (iii) subsection (4) is or was satisfied in relation to that other arrangement at a time when the election applied to that other arrangement.
 (4) This subsection is satisfied if:
 (a) the *financial arrangement hedges a foreign currency risk in relation to an anticipated *foreign equity distribution from a *connected entity; and
 (b) the distribution is *non‑assessable non‑exempt income under section 768‑5.
 (5) This subsection is satisfied if:
 (a) you enter into a *financial arrangement with a *connected entity; and
 (b) the principles or standards referred to in paragraph 230‑315(2)(a) require that a consolidated financial report be prepared that deals with both your affairs and the affairs of the connected entity; and
 (c) the report properly reflects your affairs; and
 (d) the arrangement satisfies the requirements of paragraph (1)(a); and
 (e) the arrangement would satisfy the requirements of paragraph (1)(b) or (c) but for the fact that the consolidated