Document ID: chunk:federal_register_of_legislation:C2025C00029:section:11:p14
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 11 (pt 14/20)
Character Range: 6662574–6665396

the gaining entity of providing the services; and
 (ii) the present value of a reasonable allocation of the total direct cost to the gaining entity of providing services that include the first‑mentioned services (so far as it is not already covered by subparagraph (i)); and
 (iii) the present value of a reasonable allocation of the indirect cost to the gaining entity of providing the first‑mentioned services; and
 (iv) the mark‑up worked out under subsection (2) or (3) of this section.
To work out the costs and present values referred to in paragraph (1)(b),
see section 727‑245.
 (2) If it is reasonable to estimate that an entity providing the same quantity of services of the same kind in the same market would charge for them on the basis of a particular percentage mark‑up, or on the basis of a percentage mark‑up within a particular range, the mark‑up for the purposes of subparagraph (1)(b)(iv) is:
• the total of the respective present values of the costs mentioned in subparagraphs (1)(b)(i), (ii) and (iii);
multiplied by:
• that percentage mark‑up, or the highest percentage in that range.
 (3) Otherwise, the mark‑up for the purposes of subparagraph (1)(b)(iv) is 10% of the total of the respective present values of the costs mentioned in subparagraphs (1)(b)(i), (ii) and (iii).

727‑240  What services certain provisions apply to
 (1) Sections 727‑230, 727‑235, 727‑700 and 727‑725 apply only to services consisting of:
 (a) doing work (including professional work and giving professional advice or any other kind of advice); or
Note: Examples include accounting or legal services; advertising services and financial management services.
 (b) providing (including allowing use of) facilities for entertainment, recreation or instruction; or
 (c) leasing, renting, hiring, or allowing the use of, any asset; or
 (d) packaging, transporting or storing any property; or
 (e) providing insurance; or
 (f) services provided, by a banker to a customer, in the course of the banker carrying on the business of banking; or
 (g) lending money or providing any other form of financial accommodation.
 (2) It does not matter whether services covered by paragraph (1)(a) also involve supplying property.

727‑245  How to work out certain amounts for the purposes of sections 727‑230 and 727‑235
 (1) The costs mentioned in paragraph 727‑230(b) or 727‑235(1)(b) are to be worked out:
 (a) in accordance with generally accepted accounting practices; and
 (b) to the extent that the services are to be provided in the future, on the basis of a reasonable estimate of those costs.
 (2) To avoid doubt, the direct cost or indirect cost mentioned in paragraph 727‑230(b) or 727‑235(1)(b) does not include:
 (a) to the extent that the services consist of or include lending money or providing any other form of financial