Singapore legislation
Regulation 14
Regulation 14
Adjustments for excluded equity gain or loss
Subregulation 1
The FANIL of a constituent entity of an MNE group for a financial year must be adjusted for any excluded equity gain or loss as follows:
in the case of any gain or loss from changes in fair value of a direct ownership interest in another entity or the impairment of such interest, other than a portfolio shareholding — by excluding the amount of the gain or adding back the amount of the loss or impairment as if it were a gain or loss (determined at the relevant time) from a change in fair value of a direct ownership interest or the impairment of such interest in an entity described in paragraph (2);
in the case of a profit or loss in respect of a direct ownership interest in another entity included under the equity method of accounting — by excluding the amount of the profit or adding back the amount of the loss determined at the relevant time;
in the case of a gain or loss from a disposition of a direct ownership interest in another entity other than a portfolio shareholding — by excluding the amount of the gain or adding back the amount of the loss as if it were a gain or loss (determined at the relevant time) from a disposition of a direct ownership interest in an entity described in paragraph (2).
Subregulation 2
The entity in paragraph (1)(a) or (c) is one to which the members of the MNE group have, at the relevant time for that provision, direct ownership interests between them that entitle them to 10% or more of that entity’s profits, capital, reserves and voting rights.
Subregulation 3
The “relevant time” is —
in the case of paragraph (1)(a) and (b) — the end of the financial year in which the gain, profit or loss arose; and
in the case of paragraph (1)(c) — immediately before the disposition.