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CH 9: Interest apportionment: excess debt entity
or “Splitting up interest costs when you have a lot of debt”
You could also call this:

“How reporting banks split interest costs and include them as income”

When you’re a reporting bank, you might need to split up your interest costs. This is called apportionment. The law says you have to do this in certain situations.

If you need to apportion your interest, you’ll use a special calculation. This calculation is explained in another part of the law called section FE 7. When you do this calculation, you’ll get a certain amount.

The amount you get from this calculation isn’t just a number on paper. It actually counts as income for your bank. This means you need to include it when you’re working out your income for the year.

The timing is important too. You include this amount as income in the same year as the measurement period. The measurement period is the time when you did the calculation.

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Next up: CH 10B: Interest apportionment: public project debt

or “How to split and count interest on public project debt for tax purposes”
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Part C Income
Adjustments

CH 10Interest apportionment: reporting bank

  1. This section applies when a reporting bank is required under section FE 7 (Apportionment of interest by reporting bank) to apportion its interest expenditure.

  2. The amount calculated under section FE 7(2) is treated as income of the reporting bank for the income year in which the measurement period falls.

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