Item 10 Disposal losses - post-29 January 2001

Notes on balancing adjustments - item 10

You may need to make balancing adjustments under subsection 73BF of ITAA 1936 or section 40-292 of ITAA 1997 if section 73BA depreciating assets are disposed of (section 40-295 of ITAA 1997). If the termination value of the asset at the time of disposal is different from its adjustable value just before the event occurred (section 40-300 of ITAA 1997), you will need to make a balancing adjustment. Record the amount of this balancing adjustment at item 10 for a loss or at item 11 for a profit (negative).

If the section 73BA depreciating asset has never attracted deductions under Divisions 42 or 40 of ITAA 1997, calculate the balancing adjustment under section 73BF. For section 73BA depreciating assets that have attracted such deductions, calculate the balancing adjustment under section 40-292 of ITAA 1997.

If the company is entitled to deduct an amount under section 40-292 of ITAA 1997 following a balancing adjustment event (such as disposal), include the amount of any part of the balancing adjustment that the company is entitled to increase by 25% under the formula in subsection 40-292(4) of ITAA 1997, in the calculation of the base amount for item 10.

If the company is entitled to deduct an amount under section 73BF of ITAA 1936 following a balancing adjustment event, include at item 10 the amount of any part of the balancing adjustment that the company is entitled to increase by 25% under the formula in subsection 73BF(3) of ITAA 1936.

At K enter the amount of any balancing adjustment (deduction) (the base amount).

At N enter the amount of any balancing adjustment (deduction) amounts claimable at 100%.

At O enter the amount of any balancing adjustment (deduction) amounts claimable at 125%.

More information

For more information, see:

• section 40-292 of ITAA 1997
• section 73BF of ITAA 1936
• Guide to the R&D tax concession