Tax Laws Amendment (2008 Measures No. 5) Act 2008 (145 of 2008)
Schedule 2 Thin capitalisation and international financial reporting standards
Income Tax Assessment Act 1997
5 After section 820-680
Insert:
820-682 Recognition of assets and liabilities - modifying application of accounting standards
Deferred tax assets and deferred tax liabilities
(1) Despite subsections 820-680(1) and (1A), an entity must not recognise:
(a) a deferred tax liability (within the meaning of the *accounting standards) as a liability for the purposes of this Division; or
(b) a deferred tax asset (within the meaning of the accounting standards) as an asset for the purposes of this Division.
Note: Subsections 820-680(1) and (1A) require compliance with accounting standards.
Surpluses and deficits in defined benefit superannuation plans
(2) Despite subsections 820-680(1) and (1A), an entity must not recognise an amount relating to a defined benefit plan (within the meaning of the *accounting standards) as:
(a) a liability for the purposes of this Division; or
(b) an asset for the purposes of this Division.
Note: Subsections 820-680(1) and (1A) require compliance with accounting standards.
Not applicable to ADIs
(3) This section does not apply in relation to an entity for a period if, for the period, the entity is an *outward investing entity (ADI) or an *inward investing entity (ADI).
Not applicable to records about Australian permanent establishments
(4) This section does not apply for the purposes of section 820-960.
820-683 Recognition of internally generated intangible items - modifying application of accounting standards
Accounting standards prevent recognition of some items
(1) Subsection (2) applies in relation to an item, other than internally generated goodwill (within the meaning of *accounting standard AASB 138), if:
(a) the item cannot be recognised under that standard as an internally generated intangible asset (within the meaning of that standard) because that standard determines that the cost of the item cannot be distinguished from the cost of developing the entity's business as a whole; and
(b) the item would otherwise meet criteria under that standard for recognition as such an asset.
Note 1: As a general rule, an entity must comply with the accounting standards when recognising its assets for the purposes of this Division (see subsections 820-680(1) and (1A)).
Note 2: This section does not apply to ADIs (see subsection (6)).
Entity may choose to recognise the item as an intangible asset
(2) Despite subsections 820-680(1) and (1A), the entity may choose to recognise the item as such an asset for a period for the purposes of this Division (other than section 820-960).
Note: Section 820-960 is about records for Australian permanent establishments.
(3) A choice under subsection (2):
(a) must be in writing and may cover more than one item; and
(b) must be made before the due day for lodging the entity's *income tax return for the income year that is, or that includes, the period; and
(c) subject to subsection (4), has effect, for the entity and the item, for the period and each later period.
(4) The entity may, in writing, revoke a choice under subsection (2). The revocation has effect:
(a) for each period in the income year for which the entity is next required to lodge an *income tax return; and
(b) for each later period.
(5) When:
(a) recognising an item as an asset under this section; and
(b) calculating the value of the asset (including revaluing the asset);
the entity must, to the maximum extent possible, comply with the *accounting standards as if the recognition were allowed by those standards. This subsection has effect subject to section 820-684.
Note: Section 820-684 will allow the entity to revalue the asset even if accounting standard AASB 138 would prevent this because of the absence of an active market.
Choice not available to ADIs
(6) An entity cannot make a choice under subsection (2) for a period if, for the period, the entity is an *outward investing entity (ADI) or an *inward investing entity (ADI).
820-684 Valuation of intangible assets if no active market - modifying application of accounting standards
Accounting standards prevent revaluation of some assets
(1) Subsection (2) applies if complying with *accounting standard AASB 138 would prevent an entity from revaluing an intangible asset (within the meaning of that standard) because of the absence of an active market (within the meaning of that standard).
Note 1: As a general rule, an entity must comply with the accounting standards when revaluing its assets for the purposes of this Division (see subsection 820-680(1)).
Note 2: This section does not apply to ADIs (see subsection (7)).
Entity may choose to revalue the asset
(2) Despite subsection 820-680(1), the entity may choose to revalue the asset for a period for the purposes of this Division (other than section 820-960).
Note: Section 820-960 is about records for Australian permanent establishments.
(3) A choice under subsection (2):
(a) must be in writing and may cover more than one asset; and
(b) must be made before the due day for lodging the entity's *income tax return for the income year that is, or that includes, the period; and
(c) subject to subsection (4), has effect, for the entity and the item, for the period and each later period.
(4) The entity may, in writing, revoke a choice under subsection (2). The revocation has effect:
(a) for each period in the income year for which the entity is next required to lodge an *income tax return; and
(b) for each later period.
Requirements for such revaluations
(5) Subsections 820-680(2) and (2B) apply in relation to a revaluation under subsection (2) in a corresponding way to the way they apply in relation to a revaluation mentioned in paragraph 820-680(1)(a).
Note 1: Subsections 820-680(2) and (2B) set out requirements and other matters in relation to revaluations under subsection 820-680(1).
Note 2: The entity must also keep records in accordance with section 820-985 about the revaluation.
(6) When revaluing an asset under subsection (2), the entity must, to the maximum extent possible, comply with the *accounting standards as if the revaluation were allowed by those standards.
Choice not available to ADIs
(7) An entity cannot make a choice under subsection (2) for a period if, for the period, the entity is an *outward investing entity (ADI) or an *inward investing entity (ADI).