Document ID: chunk:federal_register_of_legislation:C2025C00126:section:4:p1
Version: federal_register_of_legislation:C2025C00126
Segment Type: section
Provision Reference: s 4 (pt 1/2)
Character Range: 114058–116693

4                           Third party payments                                       Division 134

Division 21—Bad debts

21‑1  What this Division is about
       If debts are written off as bad or are outstanding after 12 months, adjustments (for the purpose of working out net amounts) are made. They can arise both for amounts written off or outstanding and for recovery of amounts previously written off or outstanding.
Note: This Division does not apply to supplies and acquisitions that you account for on a cash basis (except in the limited circumstances referred to in Division 159).

21‑5  Writing off bad debts (taxable supplies)
 (1) You have a decreasing adjustment if:
 (a) you made a *taxable supply; and
 (b) the whole or part of the *consideration for the supply has not been received; and
 (c) you write off as bad the whole or a part of the debt, or the whole or a part of the debt has been *overdue for 12 months or more.
The amount of the decreasing adjustment is 1/11 of the amount written off, or 1/11 of the amount that has been overdue for 12 months or more, as the case requires.
 (2) However, you cannot have an *adjustment under this section if you *account on a cash basis.

21‑10  Recovering amounts previously written off (taxable supplies)
  You have an increasing adjustment if:
 (a) you made a *taxable supply in relation to which you had a *decreasing adjustment under section 21‑5 for a debt; and
 (b) you recover the whole or a part of the amount written off, or the whole or a part of the amount that has been *overdue for 12 months or more, as the case requires.
The amount of the increasing adjustment is 1/11 of the amount recovered.

21‑15  Bad debts written off (creditable acquisitions)
 (1) You have an increasing adjustment if:
 (a) you made a *creditable acquisition for *consideration; and
 (b) the whole or part of the consideration is *overdue, but you have not provided the consideration overdue; and
 (c) the supplier of the thing you acquired writes off as bad the whole or a part of the debt, or the whole or a part of the debt has been overdue for 12 months or more.
The amount of the increasing adjustment is 1/11 of the amount written off, or 1/11 of the amount that has been overdue for 12 months or more, as the case requires.
 (2) However, you cannot have an *adjustment under this section if you *account on a cash basis.

21‑20  Recovering amounts previously written off (creditable acquisitions)
  You have a decreasing adjustment if:
 (a) you made a *creditable acquisition in relation to which you had an *increasing adjustment under section 21‑15 for a debt; and
 (b)