Article 16 - Adjustments in Respect of Assets and Liabilities that Are Subject to Fair Value or Impairment Accounting

At the election of the Filing Constituent Entity, gains or losses in respect of assets and liabilities that are subject to fair value or impairment accounting shall be determined on the basis of the realisation principle for the purposes of determining the Constituent Entity Income or Loss.

For the purposes of determining the gain or loss on an asset or liability which is subject to the election under Paragraph A of this Article, the carrying value of the asset or liability shall be the carrying value adjusted for accumulated depreciation at the later of:

1. The date on which the asset was acquired, or the liability was incurred.

2. The first day of the Fiscal Year in respect of which the election is made.

Gains or losses recognised in the Financial Accounting Net Income or Loss of a Constituent Entity in respect of an asset or liability which is subject to the election under Paragraph A of this Article shall be excluded for the purposes of determining the Constituent Entity Income or Loss where they result from the application of fair value or impairment accounting.

The election referred to in Paragraph A of this Article is a Five-Year Election which can be made in accordance with Article 20 of the Law and shall apply to all Constituent Entities located in the Kingdom to which the election is made unless the Filing Constituent Entity chooses to limit the election only to the tangible assets of the Constituent Entities or to Constituent Entities that are Investment Entities.

Where the election referred to in Paragraph A of this Article is revoked, the Constituent Entity shall include in the computation of its Constituent Entity Income or Loss for the first year for which the election is revoked an amount determined in accordance with the formula :