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EZ 68: Definitions
or “Explains key terms used in specific sections of the Act”
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“Accounting for interest-free and low-interest loans using IFRS reporting”

This section of the law talks about how you should handle certain types of loans when you’re doing your financial reporting. It applies when you have a loan that doesn’t charge interest or charges very low interest.

If you’re using a special financial reporting method called IFRS, there’s a rule that says you don’t have to report interest for these types of loans in the 2014-2015 tax year. But in the previous year (2013-2014), you might have reported some interest for these loans.

The law says that changing from reporting interest to not reporting interest is treated as a change in your accounting method. This change happens in the 2014-2015 tax year. There are some other rules in section EW 26(3), (4) and EW 27 that explain how to handle this change. However, one part of the rules, section EW 26(6), doesn’t apply in this case.

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Next up: EZ 69B: IFRS financial reporting method: equity or other comprehensive income

or “Rules for businesses using IFRS reporting when equity or income recognition changes”
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Part E Timing and quantifying rules
Terminating provisions: Entry to new life insurance regime: transitional and miscellaneous provisions

EZ 69IFRS financial reporting method: interest-free and low-interest loans

  1. This section applies when—

  2. section EW 15D(2)(ac) or (ad) (IFRS financial reporting method) modifies an IFRS rule so that the person does not allocate interest for a financial arrangement for the 2014–15 income year; and
    1. the person has allocated, for the financial arrangement for the 2013–14 income year, an amount that the person would not be allowed to allocate if section EW 15D(2)(ac) and (ad) applied for the 2013–14 income year.

      1. The change from the allocation treatment described in subsection (1)(b) (the old method) to the non-allocation treatment described in subsection (1)(a) (the new method) is treated as a change for the 2014–15 income year under section EW 26(2). Sections EW 26(3), (4) and EW 27 apply accordingly, but section EW 26(6) does not apply.

      Notes
      • Section EZ 69: inserted, on (applying for the 2014–15 and later income years), by section 67(1) of the Taxation (Annual Rates, Foreign Superannuation, and Remedial Matters) Act 2014 (2014 No 4).