Private ruling: Assessable income, allowable deduction and capital allowance
Published: November 2012

Ruling: Q1: Is the amount received assessable income for Entity A under section 6-5 of the Income Tax Assessment Act 1997 (ITAA 1997) in the relevant income year? | A1: Yes. | Q2: Did the purchase of equipment give rise to a balancing adjustment amount under sections 40-285 of the ITAA 1997 in the income year in which the balancing adjustment event occurred? | A2: Yes. | Q3: Are the lease payments deductible as they are due for payment under section 8-1 of the ITAA 1997? | A15: Yes. | Q4: Did the replacement of the equipment give rise to a balancing adjustment amount to Entity A under section 40-285 of the ITAA 1997 in the income year in which the balancing adjustment event occurred? | A16: Yes.




Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. If you have any concerns about this ruling you wish to discuss, you will find our contact details in the fact sheet. | Question 4(a): In respect of the subsidy amounts, are they assessable income under section 6-5 of the ITAA 1997? | Question 4(b): In respect of the subsidy amounts, are they offset against lease payments under section 6-5 of the ITAA 1997? | Question 5(a): In respect of the credit note, does it constitute assessable income under section 6-5 of the ITAA 1997? | Question 5(b): In respect of the credit note, does it constitute assessable income under section 6-10 of the ITAA 1997? | Question 5(c): In respect of the credit note, will the first element of cost of those spare parts purchased be reduced under section 40-180 of the ITAA 1997, to the extent that they are depreciating assets? | Question 5(d): In respect of the credit note, will the credit give rise to a reduced deduction under section 8-1 of the ITAA 1997 to the extent that those parts are consumables? | Question 6(a): In respect of the discount provided to Entity A, does it constitute assessable income under section 6-5 of the ITAA 1997? | Question 6(b): In respect of the discount provided to Entity A, does it constitute assessable income under section 6-10 of the ITAA 1997? | Question 6(c): In respect of the discount provided to Entity A, will the first element of the cost of the parts purchased be reduced under section 40-180 of the ITAA 1997 to the extent that they are depreciating assets? | Question 7(a): In respect of the contribution by Entity B, does it constitute assessable income under section 6-5 of the ITAA 1997? | Question 7(b): In respect of the contribution by Entity B, does it constitute assessable income under section 6-10 of the ITAA 1997? | Question 7(c): In respect of the contribution by Entity B, will the first element of the cost of the parts consumed covered by Entity B's contribution be reduced under section 40-180 of the ITAA 1997, to the extent that they are depreciating assets?