Document ID: chunk:federal_register_of_legislation:C2025C00029:section:4:p16
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 4 (pt 16/55)
Character Range: 3838333–3841260

method to loss resulting from impairment
230‑175 Running balancing adjustments

Realisation method
230‑180 Realisation method

Reassessment and re‑estimation
230‑185 Reassessment
230‑190 Re‑estimation
230‑192 Re‑estimation—impairments and reversals
230‑195 Balancing adjustment if rate of return maintained on re‑estimation
230‑200 Re‑estimation if balancing adjustment on partial disposal

Guide to Subdivision 230‑B

230‑90  What this Subdivision is about

      This Subdivision applies the accruals method to determine the amount and timing of gains and losses from a financial arrangement if they are sufficiently certain for such accrual to be done.
      This Subdivision applies the realisation method to determine the amount and timing of gains and losses if they are not sufficiently certain to be dealt with under the accruals method.
      If the accruals method is applied to a gain or loss on the basis of an estimate of a financial benefit and the benefit when received or provided is more or less than the estimate, a balancing adjustment is made to correct for the underestimate or overestimate.
      If the accruals method is being applied to gains and losses from the arrangement and there is a material change to the arrangement, or the circumstances in which it operates, a reassessment is made of whether the accruals method or the realisation method should apply to gains and losses from the arrangement.
      A change in circumstances may also cause a re‑estimation of gains and losses that the accruals method is being applied to.

Objects of Subdivision

230‑95  Objects of this Subdivision
  The objects of this Subdivision are:
 (a) to properly recognise gains and losses from *financial arrangements by allocating them to appropriate periods of time; and
 (b) to reduce compliance costs by reflecting commercial accounting concepts where appropriate; and
 (c) to minimise tax deferral.

When accruals method or realisation method applies

230‑100  When accruals method or realisation method applies

When accruals method applies and when realisation method applies
 (1) This section tells you when to apply the accruals method and when to apply the realisation method if this Subdivision applies to gains and losses from a *financial arrangement.

Accruals method—sufficiently certain overall gain or loss at start time
 (2) The accruals method provided for in this Subdivision applies to a gain or loss you have from a *financial arrangement if:
 (a) the gain or loss is an overall gain or loss from the arrangement; and
 (b) the gain or loss is sufficiently certain at the time when you start to have the arrangement; and
 (c) you choose to apply the accruals method to the gain or loss, or subsection (4) applies to the gain or loss.
Note: Subsection 230‑105(1) tells you when you have a sufficiently certain overall gain or loss.

Accruals method—sufficiently certain particular gain or loss