Commonwealth Consolidated Acts

INCOME TAX ASSESSMENT ACT 1997 - SECT 715.375

  (1)   Subsection   (2) applies if:

  (a)   an entity (the joining entity ) becomes a * subsidiary member of a * consolidated group at a time (the joining time ); and

  (b)   a thing (the accounting liability ) is, in accordance with * accounting standards, or statements of accounting concepts made by the Australian Accounting Standards Board, a liability of the joining entity at the joining time (disregarding subsection   701 - 1(1) (the single entity rule)) that can or must be recognised in the entity's statement of financial position; and

  (c)   the accounting liability is or is part of a * Division   230 financial arrangement of the head company at the joining time (because of subsection   701 - 1(1) (the single entity rule)).

  (2)   For the purposes of Division   230 and Schedule   1 to the Tax Laws Amendment (Taxation of Financial Arrangements) Act 2009 , treat the * head company of the group as starting to have the accounting liability at the joining time for receiving a payment equal to:

  (a)   if the liability is or is part of a * Division   230 financial arrangement of the head company at the joining time (because of subsection   701 - 1(1) (the single entity rule)):

  (i)   to which Subdivision   230 - B (accruals method or realisation method) applies; or

  (ii)   to which Subdivision   230 - E (hedging financial arrangements method) applies;

    the amount of the liability, as determined in accordance with:

  (iii)   the joining entity's * accounting principles for tax cost setting; or

  (iv)   if the amount of the liability cannot be determined in accordance with the joining entity's accounting principles for tax cost setting--comparable standards for accounting made under a * foreign law; or

  (b)   otherwise--the liability's * Division   230 starting value at the joining time.