Document ID: chunk:federal_register_of_legislation:F2024L01525:body:0:p17
Version: federal_register_of_legislation:F2024L01525
Segment Type: other
Provision Reference: 
Character Range: 45374–48619

surplus or deficit of HPS 340 liabilities outlined in paragraph 32(f) of this Prudential Standard.
 3.          The netting of deferred tax assets and deferred tax liabilities must only be applied where the private health insurer has a legally enforceable right to set-off current tax assets against current tax liabilities where they relate to income taxes levied by the same taxation authority and the taxation authority permits the private health insurer to make or receive a single net payment.
 4.          The deferred tax liabilities and deferred tax assets that may be netted must exclude amounts that have been used to adjust:
         1.           goodwill and intangible assets; and
         2.           defined benefit superannuation assets.
 5.          In order to apply the treatment in paragraph 10 of this Attachment, a private health insurer must:
         1.           have procedures in place to monitor changes in relevant laws and taxation practices that may affect the written opinions it is required to obtain covering netting of deferred tax assets and deferred tax liabilities; and
         2.           ensure that the written opinions are updated in the event of changes in laws or taxation practices overseas that could materially impact on overseas taxation authorities continuing to allow netting of deferred tax assets and deferred tax liabilities.

Gains and losses arising from changes in own creditworthiness
 1.          A private health insurer must eliminate all unrealised gains and losses that have resulted from changes in the value of liabilities (including capital instruments) and any associated embedded derivatives due to changes in the private health insurer's own creditworthiness. Additional Tier 1 and Tier 2 Capital instruments must continue to be measured for capital adequacy purposes at their contractual values. Additional Tier 1 Capital and Tier 2 Capital instruments can be hedged in accordance with accounting standards.

Goodwill and other intangibles
 1.          Subject to paragraph 18 of this Attachment, a private health insurer must deduct the following, net of any associated deferred tax assets and deferred tax liabilities that would be extinguished if the assets involved become impaired or derecognised under Australian Accounting Standards:
         1.           goodwill and any other intangible assets[15] arising from an acquisition, net of adjustments to profit or loss reflecting any changes arising from 'impairment' of goodwill; and
         2.           other intangible assets net of adjustments to profit or loss reflecting amortisation and impairment. Intangible assets are as defined in Australian Accounting Standards and include capitalised expenses and capitalised transaction costs. These include, but are not limited to:
                 1.             costs associated with debt raisings and other similar transaction-related costs that are capitalised as an asset;
                 2.          costs associated with issuing capital instruments if not already charged to profit and loss;
                 3.        capitalised information technology software costs; and
                 4.         other capitalised expenses including capitalised expenses