Document ID: chunk:federal_register_of_legislation:C2009C00311:clause:1_2:p3
Version: federal_register_of_legislation:C2009C00311
Segment Type: clause
Provision Reference: sch 1 cl 2 (pt 3/5)
Character Range: 10914–13707

maximum amount of consideration the original entity would need to receive if it were to dispose, at the completion time, of those assets without an amount being assessable income of, or deductible to, the original entity; and
                (d) the amount worked out under steps 2 and 3.

           Step 2. For the original entity's *trading stock, add up:

                (a) the *value of the trading stock at the start of the income year containing the completion time; and
                (b) for *livestock acquired by natural increase during that income year but before the completion time—the *cost of that livestock; and
                (c) the amount of any outgoing incurred in connection with acquiring an item of trading stock during that income year but before the completion time (except livestock acquired by natural increase); and
                (d) the amount of any outgoings forming part of the cost of the trading stock incurred by the entity during its current holding of the trading stock but before the completion time.

           Step 3. For any asset of the original entity not covered by steps 1 and 2, work out the amount that would be the asset's *cost base at the completion time if it were a *CGT asset.
           Step 4. Subtract from the result of step 1 the original entity's liabilities (if any) at the completion time in respect of those assets.
           Step 5. If there is one class of *membership interests in the original entity, divide the result of step 4 by the total number of those membership interests at the completion time.
            If there are 2 or more classes of membership interests in the original entity, allocate a portion of the result of step 4 to each class in proportion to the *market value of all the membership interests in that class and divide that result by the total number of membership interests in that class at the completion time.
Note 1: For the purposes of this subsection, Division 701 (Core rules for consolidated groups) is disregarded for an original entity that becomes a subsidiary member of a consolidated group or MEC group under the arrangement (see paragraph 715‑910(1)(a)).

Note 2: If the original entity is the head company of a consolidated group or MEC group, then subsection 701‑1(1) (the single entity rule) and section 701‑5 (the entry history rule) apply in relation to that group when working out steps 1 and 2 (see subsection 715‑910(2)).

Note 3: For step 5, the replacement entity may choose to use the officially quoted price of the qualifying interests as their market value (see subsection 124‑784A(3)).

First element of cost base—interests acquired in exchange for replacement interests and cash etc.

 (3) However, if the qualifying interest was acquired under the *arrangement