Article 3 details the methodology for determining Pillar Two Income or Loss, starting with Financial Accounting Net Income or Loss based on IFRS or other acceptable standards. It prescribes mandatory adjustments for items such as net taxes expense, excluded dividends, and equity gains/losses. The article covers complex scenarios including stock-based compensation elections, arm's length adjustments for intragroup transactions, and the exclusion of international shipping income. It also provides specific rules for allocating income between main entities and permanent establishments, and from flow-through entities to their owners.