Document ID: chunk:federal_register_of_legislation:C2025C00029:section:12:p1
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 12 (pt 1/43)
Character Range: 3946918–3950102

12                                               a net investment in a foreign operation (within the meaning of the *accounting principles) that is not carried on through:                                                                      (a) to the extent that the net investment would give rise to income that is *non‑assessable non‑exempt income under section 23AH of the Income Tax Assessment Act 1936—is treated as non‑assessable non‑exempt income; and  (a) to the extent that the net investment would give rise to income that is non‑assessable non‑exempt income under section 23AH of the Income Tax Assessment Act 1936—is not deductible; and
                                                 (a) a company in which you hold shares; or                                                                                                                                                      (b) otherwise—is treated in accordance with the item or items in this table that are applicable to the gain.                                                                                                                (b) otherwise—is treated in accordance with the item or items in this table that are applicable to the loss.
                                                 (b) a company that is a subsidiary of yours (within the meaning of the Corporations Act 2001).

 (5) Subsection (6) applies if:
 (a) a *hedged item is your net investment in a foreign operation (within the meaning of the *accounting principles); and
 (b) the foreign operation is carried on through:
 (i) a company in which you hold *shares; or
 (ii) a company that is a subsidiary of yours (within the meaning of the Corporations Act 2001).
 (6) The table in subsection (4) has effect as if:
 (a) to the extent that the *hedging financial arrangement hedges a risk or risks in relation to *shares you hold in the company—the reference in that table to the *hedged item were a reference to your interest in those shares; and
 (b) to the extent that the hedging financial arrangement hedges a risk or risks in relation to another interest you have in the company—the reference in that table to the hedged item were a reference to that interest.

230‑315  Hedging financial arrangement election

Election
 (1) You can make a hedging financial arrangement election if you are eligible under subsection (2) to make the election for the income year in which you make the election.

Eligibility to make hedging financial arrangement election for an income year
 (2) You are eligible to make a hedging financial arrangement election for an income year if:
 (a) you prepare a financial report for that income year in accordance with:
 (i) the *accounting principles; or
 (ii) if the accounting principles do not apply to the preparation of the financial report—comparable standards for accounting made under a *foreign law that apply to the preparation of the financial report under a foreign law; and
 (b) the financial report is audited in accordance with:
 (i) the *auditing principles; or
 (ii) if the auditing principles do not apply to the auditing of the financial report—comparable standards for auditing made under