Section EW 18 — Income Tax Act 2007: Market valuation method

EW 18 Market valuation method Who may use market valuation method (1) A person who is a party to a financial arrangement may use, for the arrangement, a market valuation method if— (a) either— (i) the person’s business includes dealing in financial arrangements of the class to which the arrangement belongs; or (ii) the financial arrangement is an exchange-traded option, a forward contract for foreign exchange, or a futures contract; and (b) the parties to the financial arrangement are not associated persons; and (c) either— (i) the Commissioner has approved the market, the method, and the source of information used to determine market values by a determination under section 90AC(1)(c) of the Tax Administration Act 1994; or (ii) the person can demonstrate market prices that are reliable; and (d) the method conforms with commercially acceptable practice; and (e) the person complies with section EW 25(4) ; and (f) the method is also used by the person for financial reporting purposes for financial arrangements that are the same as, or similar to, the arrangements, although section EW 23 may apply if the method is not used in this way; and (g) the person is not required to use a method under section EW 15B . Application of Tax Administration Act 1994 (2) Section 22A(1) of the Tax Administration Act 1994 applies to a person to whom subsection (1)(c)(ii) applies. Defined in this Act: associated person , business , Commissioner , financial arrangement , forward contract , futures contract , IFRS Compare: 2004 No 35 s EW 18 Section EW 18(1)(f): amended, on 1 April 2008, by section 369(1) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109). Section EW 18(1)(g): added, on 1 April 2008, by section 369(1) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109). Section EW 18 list of defined terms IFRS : inserted, on 1 April 2008, by section 369(2) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).