Supplementary Order Paper No 257

New clause 59B

After clause 59 (page 49, after line 30), insert:

59B Section FZ 7 replaced (Valuation of group assets: insurance proceeds from Canterbury earthquake)
  • Replace section FZ 7 with:

    FZ 7 Valuation of group assets: insurance proceeds from Canterbury earthquake
    • When this section applies

      (1) This section applies for the purposes of sections FE 16 (Total group assets) and FE 18 (Measurement of debts and assets of worldwide group) and a person if—

      • (a) an asset of the person's New Zealand group is damaged as a result of a Canterbury earthquake, as that term is defined in section 4 of the Canterbury Earthquake Recovery Act 2011; and

      • (b) the asset is impaired or derecognised, under generally accepted accounting practice as a result of the damage; and

      • (c) insurance for the damage is recognised at a later date under generally accepted accounting practice.

      Optional treatment of insurance

      (2) The person may choose to include an amount of the insurance, corresponding to the amount of the impairment or the derecognised value of the asset, in the value of the total group assets of the person's New Zealand group during the period—

      • (a) beginning with the impairment or derecognition of the asset; and

      • (b) ending before the earlier of—

        • (i) the recognition of the amount of insurance:

        • (ii) the beginning of the 2019–20 income year.

      Corresponding treatment for worldwide group

      (3) If a person includes an amount under subsection (2) in the value of the total group assets of the person's New Zealand group for a period, the person must include the amount in the value of the total group assets of the person's worldwide group for the period.

      Notice to Commissioner

      (4) A person choosing to apply subsection (2) for an income year must give to the Commissioner—

      • (a) notice that the person has applied this section for the income year; and

      • (b) the amount of income that would arise under section CH 9 (Interest apportionment: excess debt entity) for the income year in the absence of this section; and

      • (c) the amount of income that arises under section CH 9 for the income year after the application of this section; and

      • (d) further information required by the Commissioner.

      Form and timing of notice

      (5) The information required by subsection (4) must be given—

      • (a) in the form and by the means prescribed by the Commissioner; and

      • (b) no later than the later of 30 November 2012 and the day by which the person is required to make a return of income for the corresponding tax year.

      Defined in this Act: Commissioner, generally accepted accounting practice, income year, return of income, total group assets.