Integral fees where the modified fair value method applies
2011 amendment to Income Tax Act relating to non-integral fees (an IFRS GAAP term) and the modified fair value spreading method.
Sections EW 15(1)(a)(ii) and (b)(ii) of the Income Tax Act 2004 and the Income Tax Act 2007
The modified fair value spreading method is based on the fair value method and the consideration for the latter method is defined to ignore non-integral fees (an IFRS GAAP term). The consideration for the modified fair value method should also ignore non-integral fees. This was an oversight in the original legislation which has been amended by the Taxation (Tax Administration and Remedial Matters) Act 2011.
The amendments apply retrospectively from the application dates of the original legislation.