6 November 2000 Internal T.I. 2000-0050847 - DEEP DISCOUNT DEBT PART 1.3 TAX -- summary under Subsection 181(3)

Where a corporation has issued a bond at a discount, there is an argument that the full face amount of the bond should be included in the corporation's capital rather than the amount reflecting a reduction for the unamortized discount, if the full amount owing is disclosed in the notes. However, it is the Agency's "practice to not include amounts reflected in the notes where a bond is issued at a discount, unless the full face amount of the bond is reflected on the face of the balance sheet ... . In general, amounts reflected only in the notes to the financial statements are added to a corporation's capital only where it can be established that the additional amount actually reflects capital available to a corporation."