Commonwealth Consolidated Acts Commonwealth Consolidated Acts(1) For the purposes of step 2 in the table in section 705 - 60, the step 2 amount is worked out by adding up the amounts of each thing (an accounting liability ) that, in accordance with the joining entity's * accounting principles for tax cost setting, is a liability of the joining entity at the joining time.
Note: Certain liabilities of a life insurance company are worked out under Subdivision 713 - L: see section 713 - 520.
Exclusion for deferred tax liability
(1B) An amount is not to be added for an accounting liability that is an amount recorded in a deferred tax liability account in accordance with the joining entity's * accounting principles for tax cost setting.
(1C) Subsection (1B) does not apply to an accounting liability that relates to an asset mentioned in paragraph 713 - 515(1)(a) or (b) (certain assets of life insurance company).
Exclusion for deductible liability
(1AA) Subsection (1AB) applies if:
(a) the accounting liability is covered by subsection (1AC); and
(b) assuming that the * head company had made a payment to discharge the accounting liability to the extent that it is covered under that subsection just after the joining time, that payment would result in an amount equal to all or part of the accounting liability being a deduction to the head company of the group.
(1AB) An amount is not to be added for the accounting liability under subsection (1) to the extent of that deduction.
(1AC) A liability is covered by this subsection except to the extent that:
(a) any of the following provisions apply in relation to the liability:
(i) section 713 - 520 (certain liabilities etc. of life insurance company that joins a consolidated group);
(ii) section 715 - 375 (accounting liabilities that are, or are part of, a Division 230 financial arrangement held by an entity that joins a consolidated group); or
(b) section 713 - 515 (certain assets taken to be retained cost base assets where life insurance company joins a consolidated group) applies in relation to an asset to which the liability relates; or
(c) the liability is either of the following:
(i) the * liability for incurred claims of a * general insurance company or of a private health insurer (within the meaning of the Private Health Insurance (Prudential Supervision) Act 2015 ) under * general insurance policies;
(ii) the * liability for remaining coverage of a general insurance company or of a private health insurer (within the meaning of that Act) under general insurance policies; or
(d) the liability arises under any of the following:
(i) a * retirement village residence contract;
(ii) a * retirement village services contract.
(1AD) To avoid doubt, for the purposes of paragraph (1AC)(c), section 713 - 710 (certain liabilities, reserves, costs etc. of general insurance company that joins or leaves a consolidated group) does not affect the amount of the liability.
Exclusion where transfer of accounting liability
(2) An amount is not to be added for an accounting liability that arises because of the joining entity's ownership of an asset if, on * disposal of the asset, the accounting liability will transfer to the new owner.
Example: A liability to rehabilitate a mine site, where, under legislation or a licence, the liability will be transferred to the new owner on disposal of the mine.
Note: Adjustments reducing or increasing the amount under this section are made by sections 705 - 75 to 705 - 85.
Joining entity's accounting principles for tax cost setting
(3) The joining entity's accounting principles for tax cost setting are the * accounting principles that the entity would use if it were to prepare its financial statements just before the joining time.
Exclusion of amounts for certain securitisation liabilities
(4) An amount is not to be added for an accounting liability of the joining entity under subsection (1) if the accounting liability is covered under section 705 - 76 (securitisation liabilities).