Document ID: chunk:federal_register_of_legislation:F2024L01740:front:0:p93
Version: federal_register_of_legislation:F2024L01740
Segment Type: other
Provision Reference: 
Character Range: 232873–235607

the transferor's financial accounting gain or loss arising in connection with the GloBE Reorganisation.
This amount is the transferor's Non‑qualifying Gain or Loss in relation to the GloBE Reorganisation.
Note: The Non‑qualifying Gain or Loss is:
(a) if the amount mentioned in paragraph (a) or (b) is a gain—a positive amount; or
(b) if the amount mentioned in paragraph (a) or (b) is a loss—a negative amount.

6‑70  Fair value adjustments

Election
 (1) Subsection (2) applies if, because of an event (the triggering event), a Constituent Entity of an MNE Group (the adjusting Constituent Entity) is required or permitted to adjust the basis of its assets or the amount of its liabilities to fair value for tax purposes in the jurisdiction in which it is located.
 (2) A Filing Constituent Entity for an MNE Group may make an election for the MNE Group under this subsection that applies to the adjusting Constituent Entity.
 (3) An election under subsection (2) is:
 (a) an Annual Election (if the election specifies that it is an Annual Election); or
 (b) a Five‑Year Election (if the election specifies that it is a Five‑Year Election).

Adjustments
 (4) In computing the GloBE Income or Loss of the adjusting Constituent Entity for a Fiscal Year, apply the rules in subsections (5), (6) and (7) if:
 (a) an election under subsection (2) applies to the adjusting Constituent Entity and the Fiscal Year; and
 (b) the Fiscal Year ends after the triggering event occurred.
 (5) Include an amount of gain or loss in respect of each of the adjusting Constituent Entity's assets and liabilities computed as follows:
 (a) first, compute the difference between:
 (i) the carrying value for financial accounting purposes of the asset or liability immediately before the day of the triggering event; and
 (ii) the fair value of the asset or liability immediately after the triggering event;
 (b) then, if the triggering event is in connection with a GloBE Reorganisation in relation to which the adjusting Constituent Entity has an amount of Non‑Qualifying Gain or Loss, reduce the result of paragraph (a) by that amount.
Note: If the amount of Non‑Qualifying Gain or Loss is a negative number, reducing the result of paragraph (a) by that amount would increase it.
 (6) Use the fair value for financial accounting purposes of the asset or liability immediately after the triggering event.
 (7) Include the amount mentioned in subsection (5) as follows:
 (a) if the election is an Annual Election—include all of that amount in relation to the Fiscal Year in which the triggering event occurs;
 (b) if the election is a Five‑Year Election—include one fifth of that amount in relation to the Fiscal Year in which the triggering event occurs