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INCOME TAX ASSESSMENT ACT 1997 - SECT 230.265

Financial arrangements to which general election applies

             (1)  A * foreign exchange retranslation election under subsection 230-255(1) applies to each of your * financial arrangements:

                     (a)  that are * Division 230 financial arrangements; and

                     (b)  that are recognised in financial reports of a kind referred to in paragraph 230-255(2)(a) that are audited, or required to be audited, as referred to in paragraph 230-255(2)(b); and

                     (c)  in relation to which you are required by:

                              (i)  * accounting standard AASB 121 (or another accounting standard prescribed by the regulations for the purposes of this paragraph); or

                             (ii)  if that standard does not apply to the preparation of the financial report--a comparable accounting standard that applies to the preparation of the financial report under a * foreign law;

                            to recognise, in the financial reports, amounts in profit or loss (if any) that are attributable to changes in currency exchange rates; and

                     (d)  that you start to have in the income year in which you make the election or in a later income year.

This subsection has effect subject to section 230-270.

Note:          The election also has consequences under Subdivision 775-F for arrangements that are not Division 230 financial arrangements.

             (2)  If, but for this subsection, paragraphs (1)(b) and (c) would not be satisfied in relation to a * financial arrangement because the arrangement is an intra-group transaction for the purposes of:

                     (a)  * accounting standard AASB 127 (or another accounting standard prescribed by the regulations for the purposes of this paragraph); or

                     (b)  if that standard does not apply to the preparation of the financial report--a comparable accounting standard that applies to the preparation of the financial report under a * foreign law;

paragraphs (1)(b) and (c) are taken to be satisfied in relation to the arrangement.

Note:          Financial arrangements between members of a consolidated group or MEC group are not covered by this subsection because the single entity rule in subsection 701-1(1) operates to treat them as not being financial arrangements for the purposes of this Division.

             (3)  If:

                     (a)  the * financial arrangement would not be a financial arrangement if the following provisions were disregarded:

                              (i)  Division 9A of Part III of the Income Tax Assessment Act 1936 (which deals with offshore banking units);

                             (ii)  Part IIIB of that Act (which deals with Australian branches of foreign banks etc.); and

                     (b)  paragraphs (1)(b) and (c) would be satisfied in relation to the financial arrangement if the arrangement had been between 2 separate entities; and

                     (c)  the * foreign exchange retranslation election under subsection 230-255(1) is made by:

                              (i)  if section 121EB of the Income Tax Assessment Act 1936 applies--the OBU mentioned in that section (disregarding the operation of that section); or

                             (ii)  if section 160ZZW of that Act applies--the bank mentioned in that section (disregarding the operation of that section);

paragraphs (1)(b) and (c) are taken to be satisfied in relation to the arrangement.



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