Document ID: chunk:federal_register_of_legislation:C2025C00029:section:5:p5
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 5 (pt 5/13)
Character Range: 6097622–6100317

company.
Note: An example is accrued employee leave entitlements or foreign exchange gains and losses.

Increase in step 4 amount for employee share interests
 (6) If any *membership interest (an employee share interest) in the leaving entity needed to be disregarded under section 703‑35 in order for the leaving entity to be a *wholly‑owned subsidiary of the *head company at the leaving time, the step 4 amount is increased by the sum of the *market values of those interests.

Increase to cover ADI restructure preference share interests
 (6A) If any *share in the leaving entity needed to be disregarded under section 703‑37 in order for the leaving entity to be a *wholly‑owned subsidiary of the *head company at the leaving time, the step 4 amount is increased by the sum of the *market values of those shares.

Increase for non‑share capital account balance
 (6B) The step 4 amount is increased by the amount that would be the balance of the leaving entity's *non‑share capital account, assuming that:
 (a) if the leaving entity is not a company—the leaving entity were a company; and
 (b) each *non‑membership equity interest (if any) in the leaving entity held at just before the leaving time by a person other than a *member of the old group were a *non‑share equity interest in the leaving entity; and
 (c) the non‑share equity interests (if any) mentioned in paragraph (b) were the only non‑share equity interests in the leaving entity.

Increase to cover certain equity interests
 (7) The step 4 amount is increased by the *market value of each thing that, in accordance with the leaving entity's *accounting principles for tax cost setting, is equity in the leaving entity at the leaving time, where the thing is also a *debt interest.

Adjustment where amount of liability differed for purpose of calculating allocable cost amount on entry
 (8) Subsection (10) applies if:
 (a) either:
 (i) an amount (the exit liability amount) was added for a particular liability under subsection (5); or
 (ii) a particular liability is covered by subsection (5), but no amount was added for it under that subsection (in which case the exit liability amount is zero); and
 (b) the liability was taken into account in working out the *allocable cost amount (the original entry ACA) for a *subsidiary member (whether or not the leaving entity) of the old group in accordance with Division 705; and
 (c) the exit liability amount is not the same as the amount (the entry liability amount) of the liability that was taken into account in working out the original entry ACA, after any adjustments made under:
 (i) section 705‑70, 705‑75 or 705‑80; and
 (ii) subsection (9) of this section; and
 (d)