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concerning the assets other than fixed assets. But as
regards the fixed assets, the “net book value” used as
a basis merely gives a formal accounting figure which,
in the present case, cannot be considered adequate.
(3) For the purposes of the present case, and for
the fixed assets, it is a depreciated replacement value
that seems appropriate. In consequence, taking that
basis for the fixed assets, taking the order of value
indicated in the Joint Report for the non-fixed assets,
and taking into account the legitimate expectations of
the concessionaire, the Tribunal comes to the
conclusion that, at the date of 19 September, 1977, a
sum estimated at $206,041,000 represented the
reasonably appraised value of what constituted the
object of the takeover.
(4) According to the above mentioned data, the
sum total of the amount due to Aminoil as at
19 September, 1977, comes to $206,041,000 less the
liabilities of $123,041,000, that is to say
$83,000,000. This represents the outcome of the
balance-sheet of the rights and obligations of the
Parties as at 19 September, 1977.
(5) In order to establish what is due in 1982,
account must be taken both of a reasonable rate of
interest, which could be put at 7.5%, and of a level of
inflation which the Tribunal fixes at an overall rate
of 10%, - that is to say at a total annual increase of
17.5% in the amount due, over the amount due for the
preceding year.
(6) Capitalizing the above-mentioned figure of
$83,000,000 at a compound rate of 17.5% annually, gives
the amount specified in the Operative Section
(Dispositif) below.
D. Petitioner’s Tax Treatment of the Award
Petitioner took the award into account in determining the
consolidated Federal income tax liability of the affiliated group
for 1982. Petitioner identified the various components giving
rise to the $179 million payment and made the following
allocations:
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