Section FO 20 — Income Tax Act 2007: Calculation of outstanding accrued balance: amounts remitted

FO 20 Calculation of outstanding accrued balance: amounts remitted Formula (1) In section FO 18(3) , the outstanding accrued balance is calculated using the formula— consideration + prior income + income accrued in year − expenditure accrued in year − consideration paid. Definition of items in formula (2) In the formula,— (a) consideration is the consideration paid by the party under the financial arrangement: (b) prior income is the income that the party derives less the expenditure that it incurs under 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) income accrued in year is the income that the party 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) using the spreading method used to calculate income and expenditure under the financial arrangement in the income year, if the party was a party to the financial arrangement in an earlier income year; or (ii) using a spreading method that the party chooses, if the method could have been used if the income year had ended immediately before the amalgamation: (d) expenditure accrued in year is the expenditure that the party accrues under the financial arrangement for the period described in paragraph (c) and calculated as described in that paragraph: (e) consideration paid is the consideration paid to the party under the financial arrangement before the date of the amalgamation. Defined in this Act: amalgamation , consideration , financial arrangement , income , income year , spreading method , Compare: 2004 No 35 s FE 10(6)(b)