Document ID: chunk:federal_register_of_legislation:C2004C00927:clause:1_2:p7
Version: federal_register_of_legislation:C2004C00927
Segment Type: clause
Provision Reference: sch 1 cl 2 (pt 7/11)
Character Range: 28224–31082

been included for an earlier income year; and
  *    only to the extent of your total deductions to date for the loss or outgoing.

      Method statement
           Step 1.  Add up all the *assessable recoupments of the loss or outgoing that you have received (in the *current year or earlier). The result is the total assessable recoupment.
           Step 2. Add up the amounts (if any) included in your assessable income for earlier income years, in respect of the loss or outgoing, by this section or a *previous recoupment law. The result is the recoupment already assessed. (If no amount was included, the recoupment already assessed is nil.)
           Step 3. Subtract the recoupment already assessed from the total assessable recoupment. The result is the unassessed recoupment.
           Step 4. Add up each amount that you can deduct for the loss or outgoing for the *current year, or you have deducted or can deduct for the loss or outgoing for an earlier income year. The result is the total deductions for the loss or outgoing.
                  Note: The total deductions may be reduced if an amount has been included in your assessable income because of a balancing adjustment: see section 20-45.
           Step 5. Subtract the recoupment already assessed from the total deductions for the loss or outgoing. The result is the outstanding deductions.
           Step 6. The unassessed recoupment is included in your assessable income, unless it is greater than the outstanding deductions. In that case, the amount of the outstanding deductions is included instead.
Example: At the start of the 1997-98 income year, a mining company incurs $100,000 of expenditure on mining operations. $10,000 is deductible for the 1997-98 income year and for each of the following 9 income years under section 330-80.

 In the 1997-98 income year, the company receives $20,000 as recoupment. How much is assessable for the 1997-1998 income year?

 Applying the method statement:

 After Step 1: the total assessable recoupment is $20,000.

 After Step 2: the recoupment already assessed is nil.

 After Step 3: the unassessed recoupment is:
total assessable recoupment – recoupment already assessed,
ie $20,000 – 0 = $20,000.

 After Step 4: the total deductions for the loss or outgoing are $10,000.

 After Step 5: the outstanding deductions are:
total deductions for the loss or outgoing – recoupment already assessed, ie $10,000 – 0 = $10,000.

 After Step 6: the unassessed recoupment (Step 3) is greater than outstanding deductions (Step 5), so the amount of the outstanding deductions is included in assessable income, ie $10,000.

 Applying the method statement to the 1998-99 income year: a further $10,000 is included in the company's assessable income.

20-45  Effect of balancing charge

 (1) This section may affect the operation of section