Document ID: chunk:federal_register_of_legislation:C2025C00029:section:3:p25
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 3 (pt 25/53)
Character Range: 2974951–2977664

asset at the relevant time if:
 (a) the asset is a *depreciating asset (not a building or structure) for whose decline in value the company has deducted or can deduct an amount; and
 (b) the expenditure incurred by the company to *acquire the asset was less than $1,000,000 (the expenditure can include the giving of property: see section 103‑5); and
 (c) it would be reasonable for the company to conclude that the *market value of the asset at that time was not less than 80% of its *written down value at that time.

Subdivision 165‑CD—Reductions after alterations in ownership or control of loss company

Guide to Subdivision 165‑CD

165‑115GA  What this Subdivision is about
      This Subdivision prevents multiple recognition of a company's losses when significant equity and debt interests that entities (not individuals) have in the company are realised.

165‑115GB  When adjustments must be made
 (1) The operation of this Subdivision is triggered at an alteration time, which is when:
 (a) an alteration takes place in the ownership or control of the company; or
 (b) a liquidator or administrator of the company declares that shares or financial instruments are worthless (CGT event G3).
 (2) An alteration time is the trigger for making reductions and other adjustments to the reduced cost base of significant equity and debt interests in the company that are owned by an entity (not an individual) that, alone or with its associates, has a controlling stake in the company and either:
 (a) has a *direct equity interest or *indirect equity interest of at least 10% in the company; or
 (b) is owed a debt of at least $10,000 by the company or by another entity that has a significant equity or debt interest in the company.
Deductions that relate to such interests held as trading stock or otherwise on revenue account are also reduced.
 (3) Adjustments may also be made when such an entity's interests in the company are partly realised within 12 months before an alteration time or if, under an arrangement, such interests are realised partly within that period or at the alteration time and partly at an earlier time.
 (4) However, entities in which there are no interests in respect of which the company's losses have been, or can be, duplicated are not affected by this Subdivision.

165‑115GC  How adjustments are calculated
 (1) Adjustments are based on the overall loss of the company. This comprises its realised losses and unrealised losses on CGT assets.
 (2) Special rules, directed at saving compliance costs, apply to determine whether unrealised losses have to be counted at an alteration time and, if so, how to work them out.
 (3) The company may not have to calculate its unrealised