Section EW 25 — Income Tax Act 2007: Consistency of use of straight-line method and market valuation method

EW 25 Consistency of use of straight-line method and market valuation method Straight-line method for all financial arrangements (1) A person using the straight-line method in an income year for a financial arrangement must use it for all financial arrangements— (a) to which the person is a party at the end of the income year; and (b) for which the person can use it. Straight-line method for every income year of term (2) A person who starts to use the straight-line method for a financial arrangement must use it over the arrangement’s remaining term until section EW 29 requires them to calculate a base price adjustment for the arrangement, unless section EW 26(1) applies. Total value may be over $1,850,000 (3) Subsection (2) applies even if the total value of all the financial arrangements to which the person is a party is over $1,850,000 at any time in the arrangement’s remaining term. Market valuation method (4) A person who starts to use a market valuation method for a financial arrangement must use it over the arrangement’s remaining term until section EW 29 requires them to calculate a base price adjustment for the arrangement, unless section EW 6(1) applies. Increase in specified sum (5) The Governor-General may make an Order in Council under section EW 17(3) increasing the sum specified in subsection (3). Defined in this Act: financial arrangement , income year , Compare: 2004 No 35 s EW 25 Section EW 25(3) heading: amended, on 1 April 2009, by section 8(1) of the Taxation (Business Tax Measures) Act 2009 (2009 No 5). Section EW 25(3): amended, on 1 April 2009, by section 8(2) of the Taxation (Business Tax Measures) Act 2009 (2009 No 5).