December 1992 B.C. Tax Executives Institute Round Table, Q. 7 (October 1993 Access Letter, p. 479)

An indemnity payment made by one corporation to another as a result of additional Part I.3 taxes or provincial capital taxes payable by the other corporation on a transaction will not be deductible to the payor corporation either in full or as an eligible capital expenditure.

Deferred revenue constitutes a "loan or advance" to the corporation. A deferred charge is a "reserve", and therefore must be included in capital to the extent it has not been deducted in computing Part I income. Share warrants or options potentially can give rise to "other surplus".

Prepaid expenses paid to another corporation (other than a financial institution) will qualify for inclusion in the investment allowance of the payor as an "advance".