Document ID: chunk:federal_register_of_legislation:C2010C00604:clause:1_9:p2
Version: federal_register_of_legislation:C2010C00604
Segment Type: clause
Provision Reference: sch 1 cl 9 (pt 2/2)
Character Range: 24189–25709

and
 (d) in working out the group's *allocable cost amount for the third entity:
 (i) an amount is required to be added (the third entity's profit/loss adjustment amount) under step 3 in the table in section 705‑60 (about profits accruing before becoming a subsidiary member of the group); or
 (ii) an amount is required to be subtracted (also the third entity's profit/loss adjustment amount) under step 5 in the table in section 705‑60 (about losses accruing before becoming a subsidiary member of the group);
then, for the purposes of working out under section 705‑35 the *tax cost setting amount for the assets of the first entity, the *market value of the first entity's membership interests in the second entity is reduced (in a subparagraph (d)(i) case) or increased (in a subparagraph (d)(ii) case) by the first entity's interest in the third entity's profit/loss adjustment amount (see subsection (5)).

First entity's interest in third entity's profit/loss adjustment amount

 (5) The first entity's interest in the third entity's profit/loss adjustment amount is worked out using the formula:
where:

market value of first entity's membership interests in third entity held through second entity means the *market value of all *membership interests in the third entity that the first entity holds indirectly through the second entity (including through that entity and one or more other entities that become *subsidiary members of the group and are interposed between the second entity and the third entity).