For the purpose of these amendments, demutualisation occurs when members of a non-insurance mutual organisation agree to surrender their rights in the mutual in exchange for shares in the demutualised entity.

One of the characteristics of these organisations is that the members of the organisations make contributions which are not taxable to the organisations (that is, it is mutual income).

This would only occur where the interests were acquired after 19 September 1985.

This is because the cost will be based on the market value of the membership interests given up, which arguably would have little value.

Insurance organisations are taxed on their mutual income whereas non-insurance organisations are not.

These accounts reflect past payments of taxation by the entity.

Broadly, this means that at least 90% of the shares in the demutualised entity are issued to members.

The Issues Paper also proposed different treatment for the franking account surplus. It was originally going to be extinguished.

The use of a qualified valuer is necessary.

The major interested parties were the Australian Stock Exchange and the Credit Reference Association of Australia.