Commonwealth Consolidated Acts Commonwealth Consolidated Acts(1) This section applies if a * general insurance company becomes or ceases to be a * subsidiary member of a * consolidated group.
(2) If the * general insurance company becomes a * subsidiary member of the group:
(a) in working out the step 2 amount for the purposes of the table in section 705 - 60, reduce that amount by the sum of the amount of each thing mentioned in subsection (4); and
(b) in working out the * tax cost setting amount of a thing mentioned in subsection (4) for the purposes of section 705 - 35, treat the * market value of the thing as zero.
(3) If the * general insurance company ceases to be a * subsidiary member of the group:
(a) in working out the step 4 amount for the purposes of the table in section 711 - 20, reduce that amount by the sum of the amount of each thing mentioned in subsection (4); and
(b) for the purposes of section 711 - 25, treat the * terminating value of a thing mentioned in subsection (4) as zero.
(4) The things are the * general insurance company's:
(a) * assets for insurance acquisition cash flows to the extent that they are used to measure the company's adjusted * liability for remaining coverage; and
(b) deferred reinsurance expenses to the extent that they are used to measure the company's adjusted liability for remaining coverage; and
(c) recoveries receivable, or potential recoveries, measured under the * applicable insurance contracts standard to the extent that they relate to insurance contracts or reinsurance contracts; and
(d) claims handling costs that are neither attached to, nor directly attributable to, a particular claim, to the extent that these costs are used to measure the company's adjusted * liability for incurred claims; and
(e) loss components and loss - recovery components of onerous contracts to the extent that they are used to measure the company's adjusted liability for remaining coverage.
Table of Subdivisions
715 - A Treatment of unrealised losses existing when ownership or control of a company changes before or during consolidation
715 - B How Subdivision 165 - CD applies to consolidated groups and leaving entities
715 - C Common rules for the purposes of Subdivisions 715 - A and 715 - B
715 - D Treatment of company's deferred losses under Subdivision 170 - D on joining a consolidated group
715 - E Interactions with Division 775 (Foreign currency gains and losses)
715 - F Interactions with Division 230 (financial arrangements)
715 - G How value shifting rules apply to a consolidated group
715 - H Cancelling loss on realisation event for direct or indirect interest in a member of a consolidated group
715 - J Entry history rule and choices
715 - K Exit history rule and choices
715 - U Effect on conduit foreign income
715 - V Entity ceasing to be exempt from income tax on becoming subsidiary member of consolidated group
715 - W Effect on arrangements where CGT roll - overs are obtained
Table of sections
Object
715 - 15 Object of this Subdivision
Effect on Subdivision 165 - CC of a company becoming a member of a consolidated group
715 - 25 Subdivision 165 - CC stops applying to earlier changeover time
715 - 30 Meaning of 165 - CC tagged asset
715 - 35 Meaning of final RUNL
165 - CC tagged assets that affect tax cost setting amounts
715 - 50 Step 1 amount is reduced if membership interest in subsidiary member is 165 - CC tagged asset and business continuity test is failed
715 - 55 Step 2 amount is affected if liability of subsidiary member is 165 - CC tagged asset of another group member and business continuity test is failed
165 - CC tagged assets that form loss denial pools of head company when consolidated group is formed
715 - 60 Assets that the head company already owns
715 - 70 Assets of subsidiary member that become those of head company
How Subdivision 165 - CC applies to consolidated groups
715 - 75 Extension of single entity rule and entry history rule
Effect on Subdivision 165 - CC of entity leaving consolidated group
715 - 80 Application of sections 715 - 85 to 715 - 110
715 - 85 First changeover time for leaving company at or after leaving time
715 - 90 How business continuity test applies if leaving time is changeover time for leaving company
715 - 95 If ownership and control of leaving entity have not changed since head company's last changeover time
715 - 100 First choice: adjustable values of leaving assets reduced to nil
715 - 105 Second choice: head company's final RUNL applied in reducing adjustable values of leaving assets that are loss assets
715 - 110 Third choice: loss denial pool of leaving entity created
Effect of assets in loss denial pool of head company becoming assets of leaving entity
715 - 120 What happens
715 - 125 First choice: adjustable values of leaving assets reduced to nil
715 - 130 Second choice: pool's loss denial balance applied in reducing adjustable values of leaving assets that are loss assets
715 - 135 Third choice: loss denial pool of leaving entity created
Effect of first and second choices on various kinds of assets
715 - 145 Effect of choice on adjustable value of leaving asset
General provisions about loss denial pools
715 - 155 When asset leaves pool
715 - 160 How loss denial balance is applied to losses realised on assets in pool
715 - 165 When pool ceases to exist
Choices under this Subdivision
715 - 175 When choice must be made
715 - 180 Head company to notify leaving entity of choice
715 - 185 Leaving entity may choose to cancel loss denial pool by reducing adjustable values of assets in the pool