Document ID: chunk:federal_register_of_legislation:C2025C00029:section:4:p25
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 4 (pt 25/55)
Character Range: 3860134–3862826

or premium does not exceed 1%; and
 (b) when you start to have the arrangement, neither the maximum life of the arrangement (as determined under the terms and conditions of the arrangement) nor the expected life of the arrangement exceeds:
 (i) unless subparagraph (ii) applies—30 years; or
 (ii) if the regulations prescribe a different period for the purposes of this subparagraph—that period; and
 (c) each *financial benefit that you have an obligation to provide or a right to receive under the arrangement, and that gives rise to a gain or loss from the arrangement (other than a gain or loss that is attributable to any discount or premium):
 (i) relates to a period not exceeding 12 months; and
 (ii) is to be provided or received in the period to which it relates; and
Note: Different financial benefits may relate to different periods.
 (d) you prepare a financial report for the year in which you start to have the arrangement; and
 (e) that financial report is:
 (i) prepared in accordance with paragraph 230‑210(2)(a); and
 (ii) audited in accordance with paragraph 230‑210(2)(b); and
 (f) all gains and losses from the arrangement to which the accrual method applies are spread in a way that is consistent with that financial report.
 (4) For the purposes of paragraph (3)(a), assume that you will continue to have the arrangement for the rest of its expected life.

230‑145  Application of effective interest method where differing income and accounting years
 (1) This section applies if:
 (a) you prepare a financial report for a year (the first year); and
 (b) you prepare a financial report for the subsequent year (the second year); and
 (c) your income year starts in the first year and ends in the second year; and
 (d) both the financial report for the first year and the financial report for the second year are:
 (i) prepared in accordance with paragraph 230‑210(2)(a); and
 (ii) audited in accordance with paragraph 230‑210(2)(b); and
 (e) the auditor's reports are unqualified for both the financial report for the first year and the financial report for the second year.
 (2) For the purposes of paragraph 230‑140(3)(d), treat yourself as having prepared a financial report for the income year in which you start to have the arrangement.
 (3) Work out the gain or loss you make from the arrangement for the income year as follows:
 (a) firstly, work out the gain or loss you make from the arrangement for the first year in accordance with paragraph 230‑140(3)(f) (treating the first year as an income year);
 (b) next, work out how much of the gain or loss mentioned in paragraph (a) is attributable to the income year in accordance with subsection (4);
 (c) next,