Eligible tangible assets

5.3.4 — in, if located in the jurisdiction

• Property, plant and equipment
• Natural resources
• A lessee's right of use of tangible assets
• A government licence for immovable property or natural resources that entails significant investment in tangible assets

5.3.4 — out

• Property, including land or buildings, held for sale, lease or investment
• Tangible assets used in generating International Shipping Income and Qualified Ancillary International Shipping Income — ships and other maritime equipment and infrastructure

5.3.4 — and back in

The carrying value of assets attributable to income over the cap for Qualified Ancillary International Shipping Income IS included in the carve-out. This is a determination the reader makes, and is asked only where the asset has a shipping use.

Leased and mobile assets

A lessee counts its right-of-use asset. A lessor under an operating lease may count the excess of its average carrying value over the lessee's average right-of-use asset, where the asset is in the lessor's jurisdiction; for a short-term rental asset let for thirty days or less at a time, such as a hotel room or a hire car, the lessee's right of use is taken as nil. An asset located in the owner's or lessee's jurisdiction for more than half of the period counts in full, and otherwise in proportion to the time it is there.

Government licences and concessions

A licence, lease or concession from a government to use immovable property or exploit natural resources counts where using it entails significant investment in tangible property — a toll road or airport concession, mineral or oil and gas rights, a licence to use part of the communications spectrum — even if the accounts record it as an intangible. A right to charge tolls or fees accounted for as a separate service contract does not count, and nor does a licence the holder merely re-licenses to someone else.

Investment property, held for sale, and part-let buildings

Land and buildings held to earn rent or for capital appreciation are out; owner-occupied property used in the business is in, and land counts although it is not depreciated. An asset is held for sale only if it is available for immediate sale and the sale is highly probable. Where the owner lets a substantial part of a building and uses the rest, the carrying value is split on a reasonable basis such as floor area: the part it uses counts, and the let part follows the operating lease rule. A lessee with no right-of-use asset in its accounts — a short lease, or one that is not material — cannot create one for this purpose.

5.3.5 — the value counted

The average of the beginning and end of the Fiscal Year as recorded for the Consolidated Financial Statements — after purchase accounting adjustments and after eliminating gains on sales between group entities — and not the GloBE carrying value. An asset acquired or disposed of during the year counts for half. An impairment reduces the value; a revaluation increase is disregarded, so the value never exceeds what it would have been at cost.