At the election of the filing constituent entity, gains and losses in respect of assets and liabilities that are subject to fair value or impairment accounting in the consolidated financial statements of a constituent entity for a fiscal year may be determined on the basis of the realisation principle for the computation of the qualifying income or loss of that constituent entity for the same fiscal year.

Gains or losses which result from applying fair value or impairment accounting in respect of an asset or a liability shall be excluded from the computation of the qualifying income or loss of a constituent entity under the first subparagraph.

The carrying value of an asset or a liability for the purpose of determining a gain or a loss under the first subparagraph shall be the carrying value at the time the asset was acquired or the liability was incurred, or on the first day of the fiscal year in which the election is made, whichever date is the latest.

The election shall be made in accordance with Article 43, Paragraph 1 of the Directive and shall apply to the assets and liabilities of all the constituent entities located in a jurisdiction, unless the filing constituent entity chooses to limit the election to the tangible assets of the constituent entities or to investment entities.

In the fiscal year in which the election is revoked, an amount equal to the difference between the fair value of the asset or liability on the first day of the fiscal year in which the revocation is made and the carrying value of the asset or liability determined pursuant to the election shall be included for the computation of the qualifying income or loss of the constituent entities.

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