Plain language law

New Zealand law explained for everyone

 Plain Language Law homepage
Back to
EZ 74: Insurance for repairs of Canterbury earthquake damage: optional timing rule for income, deductions
or “Optional timing for Canterbury earthquake insurance income and repair deductions”
You could also call this:

“How to handle certain foreign financial arrangements before 2014-2015 tax year”

This law is about how you deal with certain financial arrangements called foreign ASAPs if you use special accounting rules called IFRS. It applies to you if you have this kind of arrangement before the end of the 2013-2014 tax year and you’ve been reporting it a certain way in your tax returns.

You have two choices for how to treat these arrangements:

  1. You can use section EW 32 and section EW 33B for the 2013-2014 tax year and earlier years. These sections tell you how to value the property or services in your arrangement.

  2. You can use just section EW 32, but not section EW 33B. If you choose this, you need to change how you value the property or services under IFRS rules by not including any amount that comes from foreign exchange hedges.

No matter which option you choose, you’re allowed to add or subtract amounts from the value of the property or services. These amounts come from using the current exchange rate to re-value payments you’ve already made when you first count the property or services under IFRS rules.

This text is automatically generated. It might be out of date or be missing some parts. Find out more about how we do this.

Next up: EZ 76: Consideration for property or services: non-IFRS foreign ASAPs before 2014–15 income year

or “Rules for valuing certain foreign financial agreements before 2014-15”
Next

Part E Timing and quantifying rules
Terminating provisions: Entry to new life insurance regime: transitional and miscellaneous provisions

EZ 75Consideration for property or services: IFRS foreign ASAPs before 2014–15 income year

  1. This section applies when a person uses IFRSs to prepare financial statements and to report for financial arrangements, and—

  2. the person has a financial arrangement that is a foreign ASAP (the financial arrangement) for which section EW 32 (Consideration for agreement for sale and purchase (ASAP) of property or services, hire purchase agreement, specified option, or finance lease) applies to value the relevant property or services; and
    1. the person enters into the financial arrangement before the end of the 2013–14 income year; and
      1. for the financial arrangement, the person has filed returns of income in accordance with this section for the 2013–14 income year and every earlier income year.

        1. The person, applying sections 81 and 82 of the Taxation (Annual Rates, Employee Allowances, and Remedial Matters) Act 2014 as if in force, may—

        2. treat sections EW 32 and EW 33B (Foreign ASAPs: designated FX hedges) as applying to the financial arrangement for the 2013–14 income year and every earlier income year; or
          1. treat section EW 32 as applying, but excluding section EW 33B. The value of the relevant property or services under IFRS rules is modified by excluding an amount attributed under IFRS rules from the value on account of FX hedges.

            1. Despite subsection (2), a treatment under that subsection may be modified to allow the addition and subtraction, from the value of the property or services, of amounts arising from spot rate revaluation of payments already made at the time the property or services are recognised under IFRS rules.

            Notes
            • Section EZ 75: inserted (with effect on 1 April 2008), on , by section 100 of the Taxation (Annual Rates, Employee Allowances, and Remedial Matters) Act 2014 (2014 No 39).