Article 24 - Election to Use Realization Method in Lieu of Fair Value Accounting

When assets and liabilities are accounted for using the fair value or impairment method in the CFS, a DCE may elect to determine gains or losses under the realization method for purposes of calculating GloBE income or loss. Under this election, gains or losses related to the asset or liability are recognized upon disposal.

The aforementioned in paragraph 1 of this Article is valid for five Tax Periods and applies to all CEs located in the State, and all the assets and liabilities of all CEs located in the State that are subject to this election, unless the DCE elects to limit the application to tangible assets of such CEs or CEs that are Investment Entities. Under this election the following shall apply:

1. All gains or losses attributable to fair value accounting or impairment in respect to any asset or liability shall be excluded from GloBE income or loss;

2. The carrying value of the asset or liability, for the purpose of determining gains or losses, shall be the carrying value as of the later of the following:

   1. The first day of the election Tax Period; or

   2. The date of acquisition of the asset or creation of the liability.

3. If the above mentioned election in this Article is revoked, the GloBE income or loss is adjusted by the difference between the fair value and the determined carrying value of the asset or liability as of the beginning of the Tax Period in which the revocation applies.