9‑10 Pre‑Transition Year deferred tax as9‑10 Pre‑Transition Year deferred tax assets and liabilities—amounts

9‑10 Pre‑Transition Year deferred tax assets and liabilities—amounts

(1) For the purposes of subsection 9‑5(2), take account of a deferred tax asset or deferred tax liability: (a) if it relates to a tax credit (including a tax credit carry‑forward or a foreign tax credit) and is reflected or disclosed in the Constituent Entity’s financial accounts—in the amount set out in subsection (3); or (b) otherwise—in the amount set out in subsection (4). (2) For the purposes of subsection (1), disregard the impact of any valuation adjustment or accounting recognition adjustment with respect to the amount of a deferred tax asset. (3) For the purposes of paragraph (1)(a), the amount is as follows: (a) if the tax rate used to determine the deferred tax asset or deferred tax liability is below the Minimum Rate—the amount of the deferred tax asset or deferred tax liability reflected or disclosed in the financial accounts; (b) otherwise—the amount computed using the following formula: Start formula start fraction Deferred tax asset or liability over Applicable domestic tax rate end fraction times Minimum Rate end formula where: applicable domestic tax rate means the tax rate in the Fiscal Year preceding the Transition Year; deferred tax asset or liability means the amount of the deferred tax asset or deferred tax liability reflected or disclosed in the financial accounts. (4) For the purposes of paragraph (1)(b), the amount is as follows: (a) if paragraph (b) of this subsection does not apply—the lesser of the following: (i) the amount of the deferred tax asset or deferred tax liability reflected or disclosed in the financial accounts; (ii) that amount recast at the Minimum Rate; (b) in the case of a deferred tax asset that is attributable to a loss that, assuming the Constituent Entity computed its GloBE Income or Loss for the Fiscal Year in which the loss arose, would have been taken into account in that computation—the amount of the deferred tax asset reflected in the financial accounts recast at the Minimum Rate.