Document ID: chunk:federal_register_of_legislation:C2025C00029:section:2:p3
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 2 (pt 3/4)
Character Range: 6727469–6730274

attributable increase method
727‑805 Has there been a disaggregated attributable increase?
727‑810 Scaling‑down formula

Consequences of the method for various kinds of assets
727‑830 CGT assets
727‑835 Trading stock
727‑840 Revenue assets

727‑755  Consequences of indirect value shift
 (1) This Subdivision sets out the adjustable value method of working out the consequences (if any) of an *indirect value shift.
 (2) If those consequences are to be worked out using that method:
 (a) the *adjustable value of each *affected interest in the *losing entity is reduced as provided in this Subdivision; and
 (b) if the *gaining entity is a company or trust (except one listed in section 727‑125 (about superannuation entities)) immediately before the *IVS time, the *adjustable value of each *affected interest in the *gaining entity is uplifted as provided in this Subdivision.
 (3) The consequences for the *affected interest depend on its character. There are consequences for the interest in its character as a *CGT asset. However, if the interest is also *trading stock or a *revenue asset, there are additional consequences for it in that character.

Reductions of adjustable value

727‑770  Reduction under the adjustable value method
 (1) This section sets out how to work out the amount (if any) by which the *adjustable value of an *affected interest in the *losing entity is reduced.
 (2) First, work out under section 727‑775 whether the *indirect value shift has produced for the owner of the interest a *disaggregated attributable decrease in the *market value of the interest.
 (3) If it has not, the interest's *adjustable value is not reduced because of the *indirect value shift.
 (4) If it has, the amount (if any) by which the interest's *adjustable value is reduced is worked out on a *loss‑focussed basis under section 727‑780.
 (5) However, if a choice is made in accordance with section 727‑550 for the reduction not to be worked out on a *loss‑focussed basis, the reduction is equal to the *disaggregated attributable decrease.

Reduction not to exceed reasonable amount
 (6) If the reduction worked out as provided in subsection (4) or (5) is not reasonable in the circumstances, having regard to the objects of this Division, the interest's *adjustable value is instead reduced by so much of that reduction as is reasonable in the circumstances, having regard to those objects.
Note: The main object of this Division is set out in section 727‑95.

727‑775  Has there been a disaggregated attributable decrease?
 (1) This section sets out how to determine whether an *indirect value shift has produced, for the owner of an *equity or loan interest, a disaggregated attributable decrease in the *market value of the interest and, if so, the amount of it.
 (2) Work out the *market