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 58-70   Application of Division 40  

Application of Division 40

58-70(1)    
The *transition entity and the purchaser work out the decline in value of, and the effect of a *balancing adjustment event occurring for, each *privatised asset using Division 40 (Capital allowances) as if the asset had been acquired under a contract entered into on or after 1 July 2001.

Entity sale situation

58-70(2)    
Division 40 applies to a *privatised asset *held by the *transition entity as if the asset had not been used, or *installed ready for use, for any purpose before the *transition time.

58-70(3)    
The first element of the *cost to the *transition entity at the *transition time is the *notional written down value of the asset or the *undeducted pre-existing audited book value of the asset (depending on the choice made for the asset).

58-70(4)    
No amount incurred before the *transition time is included in the second element of the *cost of a *privatised asset.

Asset sale situation

58-70(5)    
The first element of the *cost of a *privatised asset to the purchaser at the *acquisition time is the sum of:

(a) the *notional written down value of the asset or the *undeducted pre-existing audited book value of the asset (depending on the choice made for the asset); and

(b) the amount of any incidental costs to the purchaser in acquiring the asset.