Document ID: chunk:federal_register_of_legislation:C2004A00844:clause:1_2:p3
Version: federal_register_of_legislation:C2004A00844
Segment Type: clause
Provision Reference: sch 1 cl 2 (pt 3/5)
Character Range: 70654–73502

Note: Subdivision 960‑M shows you how to index amounts.

Subdivision 40‑D—Balancing adjustments

Guide to Subdivision 40‑D

40‑280  What this Subdivision is about

      You may have to make an adjustment to your taxable income if you stop holding a depreciating asset.
      The adjustment is generally based on the difference between the actual value of the asset when you stop holding it and its adjustable value.

Table of sections

Operative provisions

40‑285 Balancing adjustments
40‑290 Reduction for non‑taxable use
40‑295 Meaning of balancing adjustment event
40‑300 Meaning of termination value
40‑305 Amount you are taken to have received under a balancing adjustment event
40‑310 Apportionment of termination value
40‑315 Expenses of balancing adjustment event
40‑320 Car to which section 40‑225 applies
40‑325 Adjustment: car limit
40‑335 Deduction for in‑house software where you will never use it
40‑340 Roll‑over relief
40‑345 What the roll‑over relief is
40‑350 Additional consequences
40‑360 Notice to allow transferee to work out how this Division applies
40‑365 Involuntary disposals
40‑370 Balancing adjustments where there has been use of different car expense methods

[This is the end of the Guide.]

Operative provisions

40‑285  Balancing adjustments

 (1) An amount is included in your assessable income if:
 (a) a *balancing adjustment event occurs for a *depreciating asset you *held and:
 (i) whose decline in value you worked out under Subdivision 40‑B; or
 (ii) whose decline in value you would have worked out under that Subdivision if you had used the asset; and
 (b) the asset's *termination value is more than its *adjustable value just before the event occurred.
The amount included is the difference between those amounts, and it is included for the income year in which the balancing adjustment event occurred.

Note 1: The most common balancing adjustment event is where you sell the depreciating asset.

Note 2: There is a different calculation if you had used different car expense methods for a car: see section 40‑370.

 (2) You can deduct an amount if:
 (a) a *balancing adjustment event occurs for a *depreciating asset you *held and:
 (i) whose decline in value you worked out under Subdivision 40‑B; or
 (ii) whose decline in value you would have worked out under that Subdivision if you had used the asset; and
 (b) the asset's *termination value is less than its *adjustable value just before the event occurred.
The amount you can deduct is the difference between those amounts, and you can deduct it for the income year in which the balancing adjustment event occurred.

Note: There is a different calculation if you had used different car expense methods for a car: see section 40‑370.

 (3) The *adjustable value of a *depreciating asset you *hold after this section applies to it is then