Section FO 19 — Income Tax Act 2007: Calculation of outstanding accrued balance: consideration for discharge

FO 19 Calculation of outstanding accrued balance: consideration for discharge Formula (1) In section FO 18(2)(a) , the outstanding accrued balance is calculated using the formula— consideration + prior expenditure + expenditure accrued in year − income accrued in year − consideration paid. Definition of items in formula (2) In the formula,— (a) consideration is the consideration paid to the amalgamating company under the financial arrangement: (b) prior expenditure is the expenditure that the amalgamating company incurs less the income that it derives from the financial arrangement calculated under either a spreading method or section EW 53 (Adjustment required) in all income years other than the current income year from the time the financial arrangement was entered into: (c) expenditure accrued in year is the expenditure that the amalgamating company accrues from the financial arrangement for the period from the first day of the income year in which the amalgamation occurs to the date of the amalgamation, calculated either— (i) if the amalgamating company was party to the financial arrangement in an earlier income year, using the spreading method it used to calculate income and expenditure under the financial arrangement in the income year; or (ii) using a spreading method that the amalgamating company chooses, if the method could have been used if the income year had ended immediately before the amalgamation: (d) income accrued in year is the income that the amalgamating company accrues from the financial arrangement for the period described in paragraph (c) and calculated as described in that paragraph: (e) consideration paid is the consideration that the amalgamating company pays for the financial arrangement before the date of the amalgamation. Defined in this Act: amalgamating company , amalgamation , consideration , financial arrangement , income , income year , pay , spreading method , Compare: 2004 No 35 s FE 10(6)(a)