Tax and Superannuation Laws Amendment (2013 Measures No. 2) Act 2013 (85 of 2013)

Schedule 8   Taxation of financial arrangements

Part 2   Accruals/realisation methods

Division 6   Impairments and reversals

Income Tax Assessment Act 1997

28   After section 230-170

Insert:

230-172 Applying accruals method to loss resulting from impairment

(1) This section applies if:

(a) there is an impairment (within the meaning of the *accounting principles) of:

(i) a *financial arrangement; or

(ii) a financial asset or financial liability that forms part of a financial arrangement; and

(b) you make a loss from the financial arrangement as a result of the impairment; and

(c) the accruals method applies to the loss.

(2) You cannot deduct a loss you make for an income year under section 230-15, to the extent that the loss results from the impairment (including as affected by any later reversal of the impairment loss (within the meaning of the *accounting principles) that resulted from the impairment).

(3) Disregard subsection (2) for the purposes of paragraph (c) of step 1 of the method statement in subsection 230-445(1).