Document ID: chunk:federal_register_of_legislation:C2013C00453:clause:1_1:p33
Version: federal_register_of_legislation:C2013C00453
Segment Type: clause
Provision Reference: sch 1 cl 1 (pt 33/52)
Character Range: 82603–85260

subsection (1) applies, you must re‑estimate the gain or loss:
 (a) unless paragraph (b) applies—as soon as reasonably practicable after you become aware of the circumstances referred to in paragraph (1)(b); or
 (b) if paragraph (1)(d) is satisfied and the terms and conditions of the *financial arrangement provide for reset dates to occur no more than 12 months apart—at the relevant reset date.
 (3) Without limiting subsection (1), the following are circumstances of the kind referred to in paragraph (1)(b):
 (a) a material change in market conditions that are relevant to the amount or value of the *financial benefits to be received or provided under the *financial arrangement;
 (b) cash flows that were previously estimated becoming known and the difference between the cash flows that become known and the cash flows that were previously estimates is not insignificant;
 (c) a right to, or a part of a right to, a financial benefit under the arrangement is written off as a bad debt;
 (d) you have made a reassessment under section 230‑185 in relation to gains or losses under the arrangement and you have determined on the reassessment under that section that the accruals method should continue to apply to those gains or losses.
 (4) You do not re‑estimate the gain or loss from a *financial arrangement under subsection (5) merely because of a change in the credit rating, or the creditworthiness, of a party or parties to the arrangement.

Nature of re‑estimation
 (5) Making a re‑estimation in relation to a gain or loss under this subsection involves:
 (a) a fresh determination of the amount of the gain or loss; and
 (b) a reapplication of the accruals method to the redetermined gain or loss to make a fresh allocation of the part of the redetermined gain or loss that has not already been allocated to intervals ending before the re‑estimation is made to intervals ending after the re‑estimation is made.

Basis for re‑estimation
 (6) You may make the fresh allocation of the gain or loss under subsection (5) on these bases:
 (a) if you satisfy subsection (7) in relation to the *financial arrangement—by maintaining the rate of return being used and adjusting the amount to which you apply the rate of return to the present value of the estimated future cash flows discounted at the maintained rate of return;
 (b) in any case—by adjusting the rate of return and maintaining the amount to which the adjusted rate of return is to be applied.
The object to be achieved by both bases is to allow you to bring the remainder of the gain or loss based on the new estimates properly to account over the remainder of the period over which you