Income Tax Assessment Act 1997

CHAPTER 2 - LIABILITY RULES OF GENERAL APPLICATION  

PART 2-15 - NON-ASSESSABLE INCOME  

Division 58 - Capital allowances for depreciating assets previously owned by an exempt entity  

Subdivision 58-B - Calculating decline in value of privatised assets under Division 40  

SECTION 58-80   Meaning of undeducted pre-existing audited book value  

58-80(1)    
The undeducted pre-existing audited book value of a *privatised asset is its *adjustable value in the hands of:

(a) the *transition entity just before the *transition time; or

(b) the *tax exempt vendor just before the *acquisition time;

worked out using the assumptions in this section.

Application of Division 40

58-80(2)    
Assume that Division 40 had always applied to work out the decline in value of the *privatised asset.

Use for taxable purposes

58-80(3)    
Assume that, in applying Division 40 to the *privatised asset, it had always been used by the *transition entity or the *tax exempt vendor wholly for *taxable purposes.

Cost

58-80(4)    
Assume that:

(a) the first element of the *privatised asset's *cost to the *transition entity or the *tax exempt vendor is its *pre-existing audited book value as at the latest time (the test time ) at which it had a pre-existing audited book value; and

(b) no amount was included in the second element of the asset's cost before the test time; and

(c) any amount included in the second element of the asset's cost after the test time had been incurred by the transition entity or the tax exempt vendor.

Acquisition time

58-80(5)    
Assume that the *transition entity or the *tax exempt vendor had acquired the *privatised asset at the test time.

Effective life

58-80(6)    
Assume that:

(a) the *transition entity or the *tax exempt vendor had chosen to use an *effective life determined by the Commissioner for the *privatised asset as in force at the *transition time or the *acquisition time; and

(b) subsection 40-95(2) did not apply.

Note:

Section 40-102 does not apply to a privatised asset for the purposes of this section.

58-80(7)    
Assume also that section 40-110 (about recalculating effective life) did not apply.