Document ID: chunk:federal_register_of_legislation:C2004A00897:clause:1_3:p15
Version: federal_register_of_legislation:C2004A00897
Segment Type: clause
Provision Reference: sch 1 cl 3 (pt 15/26)
Character Range: 140228–142792

(4) An entity to which Subdivision 820‑D or 820‑E applies for a period that is all or a part of an income year must use the frequent measurement method to calculate the average value of a matter mentioned in that Subdivision for the purposes of that application.

Note: This subsection therefore applies only to an outward investing entity (ADI) or an inward investing entity (ADI).

820‑635  The opening and closing balances method

  An entity that uses the opening and closing balances method for a period must apply the following method statement to calculate the average value of a matter for that period.

           Method statement
           Step 1. Work out the value of the particular matter as at the first day of that period.
           Step 2. Work out the value of the particular matter as at the last day of that period.
           Step 3. Add the results of steps 1 and 2.
           Step 4. Divide the result of step 3 by 2. The result of this step is the average value.
Example: ALWZ Corporation, a company that is an Australian entity, held assets valued at $95 million on the first day of an income year. It held assets valued at $105 million at the end of that year. Adding those amounts and dividing the result by 2 gives the average value of its assets for that year, which is $100 million.

820‑640  The 3 measurement days method

Application

 (1) An entity must not use the 3 measurement days method for a period that is a part of an income year unless the following days occur during that period:
 (a) the last day of the first half of the income year;
 (b) one or both of the following days:
 (i) the first day of that year;
 (ii) the last day of that year.

Method statement

 (2) An entity that uses the 3 measurement days method for a period must apply the following method statement to calculate the average value of a matter for that period.

      Method statement
           Step 1. Work out the value of the particular matter as at the first measurement day (see subsection (3)).
           Step 2. Work out the value of the particular matter as at the second measurement day (see subsection (3)).
           Step 3. Work out the value of the particular matter as at the third measurement day (see subsection (3)).
           Step 4. Add the results of steps 1, 2 and 3.
           Step 5. Divide the result of step 4 by 3. The result of this step is the average value.
Example: RJ Corporation held assets valued at $115 million on the first day of an income year. It held assets valued at $105 million on the last day of