Section EW 20 — Income Tax Act 2007: Determination method or alternative

EW 20 Determination method or alternative Who may use determination method (1) A person who is a party to a financial arrangement may use a determination method, that is, a method in a determination made by the Commissioner under section 90AC(1)(d) of the Tax Administration Act 1994 and applying to the arrangement, if— (a) the person cannot use the yield to maturity method or an alternative; and (b) the person— (i) may not use the straight-line method or a market valuation method; or (ii) may use the straight-line method or a market valuation method but chooses not to do so; and (c) the person is not required to use a method under section EW 15B . Who may use alternative (2) A person who is a party to a financial arrangement may use an alternative to a determination method, but may do so only if— (a) the person cannot use the yield to maturity method or an alternative; and (b) the person— (i) may not use the straight-line method or a market valuation method; or (ii) may use the straight-line method or a market valuation method but chooses not to do so; and (bb) the person is not required to use a method under section EW 15B ; and (c) the alternative has regard to the principles of accrual accounting; and (d) the alternative conforms with commercially acceptable practice; and (e) the alternative results in the allocation to each income year of amounts that are not materially different from those that would have been allocated using the determination method; and (f) the alternative 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 alternative is not used in this way. Defined in this Act: amount , Commissioner , financial arrangement , IFRS , Compare: 2004 No 35 s EW 20 Section EW 20(1)(b)(ii): amended, on 1 April 2008, by section 371(1) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109). Section EW 20(1)(c): added, on 1 April 2008, by section 371(1) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109). Section EW 20(2)(bb): inserted, on 1 April 2008, by section 371(2) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109). Section EW 20 list of defined terms IFRS : inserted, on 1 April 2008, by section 371(3) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).