Commonwealth Consolidated Acts Commonwealth Consolidated Acts(1) The * notional interest for an * arrangement payment period is worked out as follows:
Calculating * notional interest
Step 1. Add the * notional interest from previous * arrangement payment periods to the notional loan principal.
Step 2. Subtract any * arrangement payments that have already been made or that are due but that have not been made. The result is the outstanding notional loan principal as at the start of the * arrangement payment period.
Step 3. Work out the implicit interest rate for the * arrangement payment period, taking into account the * arrangement payments payable by the * notional buyer under the * arrangement and any * termination amounts.
Step 4. Multiply the outstanding notional loan principal by the implicit interest rate. The result is the notional interest for the * arrangement payment period.
(2) If only part of an * arrangement payment period occurs during an income year, the * notional interest for that part of the arrangement payment period is so much of the notional interest for that arrangement payment period as may appropriately be related to that income year in accordance with generally accepted accounting principles.
(3) In calculating the implicit interest rate, if any of the relevant amounts are not known at the start of the * arrangement, a reasonable estimate of the amount is to be made and is to be used for the purposes of calculating the implicit interest rate for each income year of the * notional seller.
(4) If a reasonable estimate cannot be made at that time, an estimate of the amount is to be made at the end of each income year of the * notional seller for the purposes of calculating the implicit interest rate for each income year of the notional seller.