Document ID: chunk:federal_register_of_legislation:C2025C00029:section:4:p40
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 4 (pt 40/55)
Character Range: 3896172–3899007

the re‑estimation is made.

Basis for re‑estimation
 (3) You make the fresh allocation of the gain or loss under subsection (2) 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. The object to be achieved by the fresh allocation is to allow you to bring the redetermined gain or loss properly to account over the remainder of the period over which you spread the gain or loss.

Subdivision 230‑C—Fair value method

Table of sections
230‑205 Objects of this Subdivision
230‑210 Fair value election
230‑215 Fair value election where differing income and accounting years
230‑220 Financial arrangements to which fair value election applies
230‑225 Financial arrangements to which election does not apply
230‑230 Applying fair value method to gains and losses
230‑235 Splitting financial arrangements into 2 financial arrangements
230‑240 When election ceases to apply
230‑245 Balancing adjustment if election ceases to apply

230‑205  Objects of this Subdivision
  The objects of this Subdivision are:
 (a) to allow you to align the tax treatment of gains and losses from *financial arrangements with the accounting treatment that applies where assets and liabilities are classified or designated as at fair value through profit or loss; and
 (b) to facilitate efficient price‑making; and
 (c) to achieve the above objects without allowing you to obtain an inappropriate tax benefit.

230‑210  Fair value election

Election
 (1) You may make a fair value election under this section if you are eligible under subsection (2) to make the election for the income year in which you make the election.

Eligibility to make fair value election for an income year
 (2) You are eligible to make a fair value 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 a foreign law.
Note: Section 230‑500 allows regulations to be made specifying particular foreign accounting and auditing standards as ones that are to be treated as comparable with Australian accounting and auditing principles for the purposes of this Division.

Election irrevocable
 (3) A *fair value election is irrevocable.
Note: The election may cease to have effect, or cease