Document ID: chunk:federal_register_of_legislation:C2025C00029:section:3:p4
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 3 (pt 4/5)
Character Range: 5906746–5909655

230 financial arrangement held by an entity that joins a consolidated group); or
 (b) section 713‑515 (certain assets taken to be retained cost base assets where life insurance company joins a consolidated group) applies in relation to an asset to which the liability relates; or
 (c) the liability is either of the following:
 (i) the *liability for incurred claims of a *general insurance company or of a private health insurer (within the meaning of the Private Health Insurance (Prudential Supervision) Act 2015) under *general insurance policies;
 (ii) the *liability for remaining coverage of a general insurance company or of a private health insurer (within the meaning of that Act) under general insurance policies; or
 (d) the liability arises under any of the following:
 (i) a *retirement village residence contract;
 (ii) a *retirement village services contract.
 (1AD) To avoid doubt, for the purposes of paragraph (1AC)(c), section 713‑710 (certain liabilities, reserves, costs etc. of general insurance company that joins or leaves a consolidated group) does not affect the amount of the liability.

Exclusion where transfer of accounting liability
 (2) An amount is not to be added for an accounting liability that arises because of the joining entity's ownership of an asset if, on *disposal of the asset, the accounting liability will transfer to the new owner.
Example: A liability to rehabilitate a mine site, where, under legislation or a licence, the liability will be transferred to the new owner on disposal of the mine.
Note: Adjustments reducing or increasing the amount under this section are made by sections 705‑75 to 705‑85.

Joining entity's accounting principles for tax cost setting
 (3) The joining entity's accounting principles for tax cost setting are the *accounting principles that the entity would use if it were to prepare its financial statements just before the joining time.

Exclusion of amounts for certain securitisation liabilities
 (4) An amount is not to be added for an accounting liability of the joining entity under subsection (1) if the accounting liability is covered under section 705‑76 (securitisation liabilities).

705‑75  Liabilities of the joining entity—reductions for purposes of step 2 in working out allocable cost amount

Reduction for future deduction
 (1A) Subsection (1) applies to an accounting liability to the extent that it is a liability of a kind described in:
 (a) paragraph 705‑70(1AC)(c); or
 (b) paragraph 705‑70(1AC)(d).
 (1) If some or all of an accounting liability will result in a deduction to the *head company, the amount to be added for the accounting liability under subsection 705‑70(1) is reduced by the following amount:
where:
double‑counting adjustment means the amount of any reduction that has already occurred in the accounting liability under subsection 705‑70(1) to take account of the future availability of