Document ID: chunk:federal_register_of_legislation:C2010C00604:clause:7_1:p12
Version: federal_register_of_legislation:C2010C00604
Segment Type: clause
Provision Reference: sch 7 cl 1 (pt 12/13)
Character Range: 128519–131096

effect accordingly.

Note: The consequences of the choice are worked out under this section and section 715‑145.

 (2) If:
 (a) 2 or more entities cease to be *subsidiary members of the *consolidated group; and
 (b) 2 or more of them make the second choice;
the choices have effect in the same order as the entities cease being subsidiary members. If 2 or more of the entities ceased at the same time, their choices have effect in whichever order the *head company determines.

 (3) This section applies to each of the loss assets in order, according to their respective *adjustable values (apart from this section) at the test time: from largest to smallest. (If an asset has more than one such adjustable value, use the greater or greatest of them.)

 (4) At the test time, the *adjustable value of the loss asset is reduced to the asset's *market value at that time.

 (5) However, if the *loss denial balance (as reduced by any previous reductions under this section or section 715‑160) of the *head company's *loss denial pool is less than the difference between:
 (a) the *adjustable value of the loss asset (apart from this section) at the test time; and
 (b) the asset's *market value at the test time;
the adjustable value is instead reduced at the test time by that loss denial balance.

 (6) That *loss denial balance is reduced at the leaving time by the amount of the reduction under subsection (3) or (4). If 2 or more such reductions are made for the same asset (because it has 2 or more different characters), that loss denial balance is reduced by the greater or greatest of the reductions.

715‑135  Third choice: loss denial pool of leaving entity created

 (1) The third choice can be made only if every asset that was in the *loss denial pool just before the leaving time is a leaving asset. The choice is to have a loss denial pool of the leaving entity created at the leaving time, consisting of every leaving asset. (To avoid doubt, the choice can be made even if the leaving entity is not a company.)

 (2) A choice under this section has effect accordingly. The pool is distinct from any other loss denial pool of the leaving entity.

 (3) When the leaving entity's loss denial pool is created, its loss denial balance equals the loss denial balance of the head company's loss denial pool (as reduced by any previous reductions under section 715‑130 or 715‑160).

Note: If the head company makes this choice, the leaving entity can choose to cancel the loss denial pool by reducing reduced cost bases of assets in the pool: see section 715‑185.

 (4)