Document ID: chunk:federal_register_of_legislation:C2013C00453:clause:1_12:p21
Version: federal_register_of_legislation:C2013C00453
Segment Type: clause
Provision Reference: sch 1 cl 12 (pt 21/39)
Character Range: 191281–194226

or closed out for margining purposes;
 (c) the ceasing of obligations or rights under a financial arrangement that is a *traditional security if:
 (i) the ceasing occurs because the traditional security is converted into ordinary shares in, or transferred to, a company that is the issuer of the traditional security or a *connected entity; and
 (ii) the traditional security was issued on the basis that it will or may convert into ordinary shares in, or be transferred to, the issuer of the traditional security or the connected entity;
 (d) the ceasing of obligations or rights under a financial arrangement that is a traditional security if:
 (i) the ceasing occurs because the traditional security is exchanged for ordinary shares in a company that is neither the issuer of the traditional security nor a connected entity; and
 (ii) if the ceasing of the obligations or rights occurs because of a disposal—the disposal is to the issuer of the traditional security or a connected entity; and
 (iii) the traditional security was issued on the basis that it will or may be exchanged for ordinary shares in the company.
Note: Paragraph (a)—for the treatment of bad debts, see paragraph 230‑190(3)(c).

Subsidiary member leaving consolidated group or MEC group
 (4) A balancing adjustment is not made under this Subdivision in relation to a subsidiary member of a *consolidated group or *MEC group that has a *financial arrangement ceasing to be a member of the group.

230‑445  Balancing adjustment

Complete cessation or transfer
 (1) Use the following method statement to make the balancing adjustment if paragraph 230‑435(1)(a), (b) or (d) applies:

      Method statement for balancing adjustment
           Step 1. Add up the following:

                (a) the total of all the *financial benefits you have received under the *financial arrangement;

                  Note: This would include financial benefits you receive in relation to the transfer or cessation (see paragraph 230‑60(2)(c)).

                (b) the total of the amounts that have been allowed to you as deductions, because of circumstances that have occurred before the transfer or cessation, for losses from the arrangement;
                (c) the total of the other amounts that would have been allowed to you as deductions, because of circumstances that have occurred before the transfer or cessation, for losses from the arrangement if all your losses from the arrangement were allowable as deductions;

                  Note: The losses from the arrangement here include losses made in gaining or producing exempt income or non‑assessable non‑exempt income.

                (d) the total of the amounts that will be allowed to you as deductions after the transfer or cessation because of a balancing adjustment under subitems 104(12) to (18) of the Tax Laws Amendment (Taxation of Financial Arrangements) Act 2009 to the extent to which those amounts are