Commonwealth Consolidated Acts

INCOME TAX ASSESSMENT ACT 1997 - SECT 705.80

Application

  (1A)   This section applies to an accounting liability to the extent that it is a liability of a kind described in:

  (a)   paragraph   705 - 70(1AC)(c); or

  (b)   paragraph   705 - 70(1AC)(d).

Adjustment for unrealised gains and losses

  (1)   If:

  (a)   for income tax purposes, an accounting liability, or a change in the amount of an accounting liability, (other than one owed to a * member of the joined group) is taken into account at a later time than is the case in accordance with the joining entity's * accounting principles for tax cost setting; and

  (b)   assuming that, for income tax purposes the accounting liability or change were taken into account at the same time as is the case in accordance with those standards or statements, the joined group's allocable cost amount would be different;

Note:   The difference would arise because subsection   705 - 70(1) includes income tax liabilities and steps 3 and 5 of the table in section   705 - 60 are affected by the time at which changes in liabilities are taken into account for income tax purposes.

then the amount to be added under subsection   705 - 70(1) for the accounting liability is:

  (c)   if the difference is an increase--increased by the amount of the increase; and

  (d)   if the difference is a decrease--decreased by the amount of the decrease.

Use of reliable estimate

  (2)   In working out for the purposes of subsection   (1) an amount at a particular time or in respect of a particular period, use the most reliable basis for estimation that is available.

Example:   The amount of a change in liability for employee leave entitlements over a period.