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EW 15G: Modified fair value method
or “Special valuation method for certain financial arrangements in business”
You could also call this:

“You must use specific methods for certain financial arrangements”

When you have a financial arrangement, you sometimes need to use specific ways to work out how much money you owe or are owed. These ways are called ‘determinations’. There are three main determinations you might have to use:

  1. One for notes that must be changed into something else.
  2. One for notes in New Zealand dollars that you can choose to change into something else.
  3. Another one for notes in New Zealand dollars that you can choose to change.

You can also use a different way if it’s similar to these three and gives almost the same result. This different way needs to think about why we have rules for financial arrangements.

If a new determination replaces an old one, you can use the new one instead.

When you have to use these determinations, you can’t use the usual way of working out your financial arrangement that’s mentioned in section EW 15C(1).

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Next up: EW 15I: Mandatory use of yield to maturity method for some arrangements

or “Special calculation method required for certain financial arrangements”
Next

Part E Timing and quantifying rules
Financial arrangements rules

EW 15HMandatory use of some determinations

  1. Section EW 15C(1) does not apply when any of the following determinations apply to a person and a financial arrangement:

  2. Determination G5C: Mandatory conversion convertible notes:
    1. Determination G22: Optional conversion convertible notes denominated in New Zealand dollars convertible at the option of the holder:
      1. Determination G22A: Optional convertible notes denominated in New Zealand dollars:
          1. a method other than those set out in paragraphs (a) to (c) if the alternative—
            1. has regard to the purposes of the financial arrangements rules under section EW 1(3); and
              1. is for a financial arrangement similar to 1 to which the methods set out in paragraphs (a) to (c) may apply; and
                1. results in the allocation to each income year of amounts that are not materially different from those that would have been allocated using 1 of the methods set out in paragraphs (a) to (c).

                2. For the purposes of this section, the determinations set out in subsection (1)(a) and (c) include a determination that succeeds the determination.

                Compare
                Notes
                • Section EW 15H: inserted, on , by section 366 of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
                • Section EW 15H(1)(d): repealed (with effect on 1 April 2011 and applying for a financial arrangement entered into by a person: (a) in the 2014–15 income year and later income years, unless paragraph (b) applies; (b) in an income year (the first income year) and later income years, if the person files a return of income for the first income year on the basis that this section applies to a financial arrangement entered into in the first income year, and the first income year is the 2011–12, 2012–13, 2013–14, or 2014–15 income year, and the person uses IFRSs to prepare financial statements or to report for financial arrangements for the first income year), on , by section 79(1) of the Taxation (Annual Rates, Employee Allowances, and Remedial Matters) Act 2014 (2014 No 39).
                • Section EW 15H(1)(e): amended, on (with effect on 1 April 2011), by section 78(1) (and see section 78(3) for application) of the Taxation (Annual Rates for 2017–18, Employment and Investment Income, and Remedial Matters) Act 2018 (2018 No 5).
                • Section EW 15H(1)(e)(ii): amended, on (with effect on 1 April 2011), by section 78(1) (and see section 78(3) for application) of the Taxation (Annual Rates for 2017–18, Employment and Investment Income, and Remedial Matters) Act 2018 (2018 No 5).
                • Section EW 15H(1)(e)(iii): amended, on (with effect on 1 April 2011), by section 78(1) (and see section 78(3) for application) of the Taxation (Annual Rates for 2017–18, Employment and Investment Income, and Remedial Matters) Act 2018 (2018 No 5).
                • Section EW 15H(2): amended, on (with effect on 1 April 2011), by section 78(2) (and see section 78(3) for application) of the Taxation (Annual Rates for 2017–18, Employment and Investment Income, and Remedial Matters) Act 2018 (2018 No 5).