Commonwealth Numbered Regulations Commonwealth Numbered Regulations(1) For the purposes of step 5 of the residual pricing method, an included cost for a participant in an integrated operation is a capital cost if:
(a) it is not a personal cost; and
(b) any of the following subparagraphs apply:
(i) it was incurred before the production date;
(ii) the unit of property for which it was incurred is a depreciating asset for the purposes of section 40-30 of the Income Tax Assessment Act 1997 ;
(iii) it is a project amount within the meaning of section 40-840 of the Income Tax Assessment Act 1997 .
Note: Subparagraph (b)(i) applies if, for example, a person incurs operating expenses before the production date. Those expenses will be capital costs for the purposes of this instrument.
(2) A cost that is a capital cost only because of subparagraph (1)(b)(i) is taken to have been incurred on 1 January in the financial year in which it was incurred.
Note: Costs that relate to a unit of property that is constructed over several years of tax are dealt with in section 39.
(3) For the purposes of step 5 of the residual pricing method, an included cost for a participant in an integrated operation is an operating cost if:
(a) it is not a personal cost; and
(b) it is not a capital cost.