Article 34 - Impact of Divergences in Carrying Values

For the purposes of determining a Constituent Entity's Adjusted Covered Taxes and Total Deferred Tax Adjustment Amount, where the Constituent Entity is subject to an election under Article 14 of these Regulations, any deferred tax expense or benefit related to stock-based compensation shall be computed in accordance with the stock-based compensation amount included in the Constituent Entity Income or Loss.

Where a Constituent Entity is subject to an election under Paragraph A of Article 16 of these Regulations, any deferred tax expense for the purposes of determining the Constituent Entity's Adjusted Covered Taxes shall be computed based on the carrying value of the relevant asset at the later of the following dates:

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

2. The date on which the asset was acquired.

For the purposes of determining a Constituent Entity's Adjusted Covered Taxes and Total Deferred Tax Adjustment Amount, any deferred tax asset or liability in relation to an asset or liability which has been acquired by the Constituent Entity and to which Article 13 of these Regulations applies shall be computed based on the acquired asset's or liability's carrying value determined in accordance with the provisions of the Law and these Regulations.

For the purposes of determining an acquiring Constituent Entity's Total Deferred Tax Adjustment Amount, the carrying value of the assets and liabilities to which Paragraph I of Article 38 of these Regulations applies shall be computed based on the carrying value.

For the purposes of determining a Constituent Entity's Total Deferred Tax Adjustment Amount, the carrying value of an asset or liability to which Paragraph B, C or F of Article 39 of these Regulations applies shall be computed based on the carrying value of the asset or liability initially determined under Article 39 of these Regulations and accounted for in subsequent Fiscal Years by applying the relevant Accounting Standard.