New rules have been introduced (TOFA rules) which modernise the tax treatment of gains and losses on financial arrangements. The key provisions of the TOFA rules are found in Division 230 of the ITAA 1997 which generally provides firstly the method (accruals, realisation, fair value, retranslation, hedging and reliance on financial reports) for calculating gains and losses from financial arrangements, and secondly the time at which the gains and losses from financial arrangements will be brought to account.

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