Document ID: chunk:federal_register_of_legislation:C2025C00029:section:3:p17
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 3 (pt 17/22)
Character Range: 7769116–7771828

value for the whole of the life of the scheme.
Note: For example, the value of a return based on a floating interest rate is calculated on the basis that the interest rate remains the interest rate that is applicable when the scheme is entered into.

Scheme wholly in foreign currency etc.
 (6) If all the *financial benefits provided and received under a *scheme are denominated in a particular foreign currency or in terms of quantities of a particular commodity or other unit of account, they are not to be converted into Australian currency for the purpose of comparing their relative values for the purposes of this Subdivision.

974‑40  Valuation of financial benefits—rights and options to terminate early
 (1) This section deals with the situation in which a party to a *scheme has a right or option to terminate the scheme early (whether by discharging an obligation early, converting the interest arising from the scheme into another interest or otherwise).
Note 1: An example of terminating a scheme early by discharging an obligation early is terminating a loan by discharging the obligation to repay the principal (and any outstanding interest) early.
Note 2: In certain circumstances, conversion of an interest into another interest can terminate its life (see section 974‑45).
 (2) The existence of the right or option is to be disregarded in working out the length of the life of the interest arising from the *scheme for the purposes of this Subdivision if the party does not have an *effectively non‑contingent obligation to exercise the right or option.
 (3) If the party does have an *effectively non‑contingent obligation to exercise the right or option, the life of the interest ends at the earliest time at which the party will have to exercise the right or option.
 (4) This section does not limit subsection 974‑35(2).

974‑45  Valuation of financial benefits—convertible interests
 (1) This section deals with the situation in which a *scheme gives rise to an *interest that will or may convert into an *equity interest in a company.
 (2) The life of the interest ends no later than the time when it converts into that *equity interest.
 (3) The possibility of the conversion is to be disregarded in working out the length of the life of the interest arising from the *scheme for the purposes of section 974‑35 if it is uncertain:
 (a) whether the interest will ever convert; or
 (b) when the interest will convert.
Note: Section 974‑40 deals with the situation in which a party to the scheme may exercise a right or option to convert the interest.
 (4) This section does not limit subsection 974‑35(2).

974‑50  Valuation of financial benefits—value in present value terms
 (1) Subject