3‑150 Adjustment—assets and liabilities 3‑150 Adjustment—assets and liabilities that are subject to fair value or impairment accounting

3‑150 Adjustment—assets and liabilities that are subject to fair value or impairment accounting

(1) Subsection (2) applies if an election under subsection (3) for an MNE Group applies to a Constituent Entity of the MNE Group for a Fiscal Year. (2) In computing the Constituent Entity’s GloBE Income or Loss for the Fiscal Year: (a) adjust the Constituent Entity’s Financial Accounting Net Income or Loss for the Fiscal Year so as to exclude gains or losses attributable to fair value or impairment accounting with respect to assets or liabilities to which the election applies; and (b) use the realisation principle to determine a gain or loss in respect of an asset or liability to which the election applies; and (c) for the purpose of determining a gain or loss in respect of an asset or liability to which the election applies, treat the carrying value of the asset or liability as being its carrying value, adjusted for accumulated depreciation, at the later of: (i) the beginning of the first Fiscal Year to which the election applies; or (ii) the day on which the asset was acquired or the liability was incurred. Election (3) A Filing Constituent Entity for an MNE Group may make an election for the MNE Group under this subsection that applies to: (a) a specified jurisdiction; and (b) all Constituent Entities of the MNE Group that are: (i) if the election specifies that it is to apply only to Investment Entities—Investment Entities located in the jurisdiction; or (ii) otherwise—located in the jurisdiction; and (c) all assets and liabilities of those Constituent Entities that are: (i) if the election specifies that it is to apply only to tangible assets—tangible assets subject to fair value accounting or impairment accounting; or (ii) otherwise—assets and liabilities subject to fair value accounting or impairment accounting. (4) An election under subsection (3) is a Five‑Year Election. Revocation of election (5) Subsection (6) applies if: (a) an election under subsection (3) is revoked; and (b) a Constituent Entity to which the election applied holds, at the beginning of the first Fiscal Year to which the election does not apply because of the revocation, an asset or liability to which the election applied. (6) In computing the GloBE Income or Loss of the Constituent Entity for that Fiscal Year, adjust the Constituent Entity’s Financial Accounting Net Income or Loss for that Fiscal Year so as to include the positive or negative amount that is: (a) the fair value of the asset or liability at the beginning of that Fiscal Year; reduced by: (b) the carrying value of the asset or liability as computed in accordance with paragraph (2)(c).