(1) Where the book value of assets and liabilities held by a domestic corporation increases or decreases (excluding depreciation; hereafter in this Article, referred to as "evaluation"), the book value of such assets and liabilities when calculating the amount of income for the business year which includes the date of evaluation and each subsequent business year shall be the value before evaluation; provided, the same shall not apply to any of the following cases: <Amended on Dec. 24, 2018>
1. Evaluation of tangible and intangible assets, etc. under the Insurance Business Act and other statutes (limited to where the book value increases);
2. Evaluation of inventory assets and other assets and liabilities prescribed by Presidential Decree.
(2) Assets and liabilities referred to in paragraph (1) 2 shall be separately evaluated by the method prescribed by Presidential Decree.
(3) Notwithstanding paragraphs (1) and (2), the book value of any of the following assets may be reduced by the method prescribed by Presidential Decree: <Amended on Dec. 24, 2018>
1. Inventory assets which cannot be sold at the arm's length price due to damage, decomposition, or on other grounds;
2. Tangible assets damaged or destroyed due to grounds prescribed by Presidential Decree, such as a natural disaster or fire;
3. Stocks, etc. prescribed by Presidential Decree where the issuing corporation of the relevant stocks, etc. falls any of the following cases:(a) Where the stocks, etc. goes dishonored;(b) Where the issuing corporation receives authorization for its rehabilitation plan under the Debtor Rehabilitation and Bankruptcy Act;(c) Where it reveals signs of insolvency under the Corporate Restructuring Promotion Act;(d) Where it goes bankrupt.
4. Deleted. <Dec. 24, 2018>
(4) A domestic corporation which evaluates its assets and liabilities under paragraphs (2) and (3) shall submit a detailed statement on the evaluation of such assets and liabilities to the head of the tax office having jurisdiction over the place of tax payment, as prescribed by Presidential Decree. <Amended on Dec. 24, 2018>
(5) Matters necessary for disposing of marginal profits or marginal losses arising from the evaluation of assets and liabilities under paragraphs (2) and (3), and other matters shall be prescribed by Presidential Decree. <Amended on Dec. 24, 2018>[This Article Wholly Amended on Dec. 30, 2010]