Document ID: chunk:federal_register_of_legislation:C2012C00706:clause:3_19
Version: federal_register_of_legislation:C2012C00706
Segment Type: clause
Provision Reference: sch 3 cl 19
Character Range: 80062–82493

19  Section 701‑63
Repeal the section, substitute:

701‑63  Asset forming part of goodwill, right to future income, etc.
 (1) Subsection (2) applies if an entity (the joining entity) became a subsidiary member of a *consolidated group at a time (the joining time).
 (2) For the purposes of this Part (other than this section):
 (a) treat goodwill of a business of the joining entity as a single asset; and
 (b) treat an asset of that business of the joining entity that is an *asset forming part of goodwill as being part of that single asset; and
 (c) as a result of paragraph (b), do not treat an asset of that business of the joining entity that is an asset forming part of goodwill as a separate asset.
 (3) An asset forming part of goodwill means any of the following:
 (b) a customer relationship asset, know‑how asset or other accounting intangible asset, that is not any of the following:
 (i) a *CGT asset;
 (ii) a *revenue asset;
 (iii) a *depreciating asset;
 (iv) *trading stock;
 (v) a thing that is or is part of a *Division 230 financial arrangement;
 (vi) goodwill;
 (vii) an excluded asset for the purposes of section 705‑35;
 (c) a *non‑deductible right to future income.
 (4) A *right to future income that is a right of an entity under a contract or agreement with another entity (the customer) is a non‑deductible right to future income in relation to the entity to the extent that the value of the right to future income:
 (a) is contingent on the renewal of the contract or agreement; or
 (b) is attributable to a period (if any) during which the customer can unilaterally cancel the contract or agreement without paying compensation or a penalty; or
 (c) if there is a period during which the customer can unilaterally cancel the contract or agreement, but must pay compensation or a penalty—is attributable to that period, but not to that compensation or penalty.
 (5) A right to future income is a valuable right (including a contingent right) to receive an amount for the performance of work or services or the provision of goods (other than *trading stock) if:
 (a) the valuable right forms part of a contract or agreement; and
 (b) the *market value of the valuable right (taking into account all the obligations and conditions relating to the right) is greater than nil; and
 (c) the valuable right is neither a *Division 230 financial arrangement nor a part of a Division 230 financial arrangement.