Income Tax Technical News No. 14, 9 December 1998

As a result of the review, it is now our position that if a debt obligation is renegotiated otherwise than as provided for in its original terms, the determination of whether a change in its terms is a substitution of a debt obligation for another should be made in accordance with the law of the relevant jurisdiction.

. . . [A] rescission of a debt obligation will be implied when the parties have effected such an alteration of its terms as to substitute a new obligation in its place, which is entirely inconsistent with the old, or, if not entirely inconsistent with it, inconsistent with it to an extent that goes to the very root of it.

RC will accept (at the choice of the mutual fund) either the realization method or the mark-to-market method for recognizing income on futures, forwards and options that are considered to be held on income account.

[T]he mere recording of the payable by way of journal entry, regardless that such amounts are payable on demand and the debtor has the capacity to pay such amount if such payments are demanded, does not constitute "credited" for purposes of subsection 212(1).....

While...for an amount to be "credited," an amount must be set aside and made unconditionally available for the non-resident more or less along the lines of those examples described in paragraph 5 of...77-16R4, each case should be decided on the basis of its own particular facts. This position would seem to be consistent with...Quebec Cartier Mining...84 DTC 1348 (TCC).