Document ID: chunk:federal_register_of_legislation:C2010C00690:clause:1_6:p3
Version: federal_register_of_legislation:C2010C00690
Segment Type: clause
Provision Reference: sch 1 cl 6 (pt 3/26)
Character Range: 181465–184186

(ii) if the CGT event is CGT event D2, D3 or F1—the expenditure incurred; or
 (iii) in any other case—the *cost base or *reduced cost base;
  that would be taken into account is less than the *market value of the liability.

711‑45  Liabilities etc. owed by the leaving entity—step 4 in working out allocable cost amount

 (1) For the purposes of step 4 in the table in subsection 711‑20(1), the step 4 amount is worked out by adding up the amounts of each thing (an accounting liability) that, in accordance with *accounting standards, or statements of accounting concepts made by the Australian Accounting Standards Board, is a liability of the leaving entity at the leaving time that can or must be identified in the entity's statement of financial position.

Exclusion where transfer of accounting liability

 (2) An amount is not to be added for an accounting liability that arises because of the leaving entity's ownership of an asset if, on *disposal of the asset, the accounting liability will transfer to the new owner.

Example: A liability to rehabilitate a mine site, where, under legislation or a licence, the liability will be transferred to the new owner on disposal of the mine.

Reduction for future deduction

 (3) If some or all of an accounting liability will result in a deduction to the leaving entity, the amount to be added for the accounting liability is reduced by the following amount:
where:

double‑counting adjustment means the amount of any reduction that has already occurred in the accounting liability under subsection (1) to take account of the future availability of the deduction.

Amount for intra‑group liabilities

 (4) If an accounting liability of the leaving entity is owed to a *member of the old group, the amount to be added for the liability is the *market value of the corresponding asset of the member.

Adjustment for unrealised gains and losses

 (5) If, for income tax purposes, an accounting liability, or a change in the amount of an accounting liability, (other than one owed to a *member of the joined group) is taken into account at a later time than is the case in accordance with *accounting standards or statements of accounting concepts made by the Australian Accounting Standards Board, the amount to be added for the accounting liability is equal to the payment that would be necessary to discharge the liability just before the leaving time without an amount being included in the assessable income of, or allowable as a deduction to, the *head company.

Note: An example is accrued employee leave entitlements or foreign exchange gains and losses.

Increase in step 4 amount for employee share interests

 (6) If any *membership interest (an employee