Document ID: chunk:federal_register_of_legislation:C2012A00057:clause:2_6
Version: federal_register_of_legislation:C2012A00057
Segment Type: clause
Provision Reference: sch 2 cl 6
Character Range: 7639–9736

6  After section 40‑102
Insert:

40‑103  Effective life and remaining effective life of certain vessels
 (1) If, at a particular time, item 10 of the table in subsection 40‑102(4):
 (a) starts to apply to a vessel (whether or not that item has previously applied to the vessel); or
 (b) ceases to apply to a vessel (whether or not that item subsequently applies to the vessel);
at that time the effective life of the vessel changes accordingly.
 (2) If subsection (1) applies and the decline in value of the vessel is worked out using the *prime cost method, the remaining effective life of the vessel just after that time is:
where:
alternative effective life is:
 (a) if that item starts to apply to the vessel at that time—what would have been the *effective life of the vessel just before that time if that item had applied to the vessel; or
 (b) if that item ceases to apply to the vessel at that time—what would have been the effective life of the vessel just before that time if that item had not applied to the vessel.
unadjusted effective life is what was the *effective life of the vessel just before that time.
unadjusted remaining effective life is what was the *remaining effective life of the vessel just before that time.
Example: Assume that item 10 of the table in subsection 40‑102(4) ceases to apply to a vessel after having applied to the vessel for 7 years, and again starts to apply after another 4 years. Assume further that the effective life of a vessel of that kind has been determined under section 40‑100 to be 20 years.
 The remaining effective life of the vessel just before that item ceases to apply to the vessel is 3 years. Its alternative effective life is 20 years, and its unadjusted effective life is 10 years. Its remaining effective life just after that time is therefore 6 years.
 The remaining effective life of the vessel just before that item again starts to apply to the vessel is 2 years. Its alternative effective life is 10 years, and its unadjusted effective life is 20 years. Its remaining effective life just after that time is therefore 1 year.