Document ID: chunk:federal_register_of_legislation:C2004C01190:clause:2_244:p5
Version: federal_register_of_legislation:C2004C01190
Segment Type: clause
Provision Reference: sch 2 cl 244 (pt 5/6)
Character Range: 171549–174256

or the *tax exempt vendor had chosen to use an *effective life determined by the Commissioner for the *privatised asset as in force at the *transition time or the *acquisition time; and
 (b) subsection 40‑95(2) did not apply.

 (6) Assume also that section 40‑110 (about recalculating effective life) did not apply.

58‑80  Meaning of undeducted pre‑existing audited book value

 (1) The undeducted pre‑existing audited book value of a *privatised asset is its *adjustable value in the hands of:
 (a) the *transition entity just before the *transition time; or
 (b) the *tax exempt vendor just before the *acquisition time;
worked out using the assumptions in this section.

Application of Division 40

 (2) Assume that Division 40 had always applied to work out the decline in value of the *privatised asset.

Use for taxable purposes

 (3) Assume that, in applying Division 40 to the *privatised asset, it had always been used by the *transition entity or the *tax exempt vendor wholly for *taxable purposes.

Cost

 (4) Assume that:
 (a) the first element of the *privatised asset's *cost to the *transition entity or the *tax exempt vendor is its *pre‑existing audited book value as at the latest time (the test time) at which it had a pre‑existing audited book value; and
 (b) no amount was included in the second element of the asset's cost before the test time; and
 (c) any amount included in the second element of the asset's cost after the test time had been incurred by the transition entity or the tax exempt vendor.

Acquisition time

 (5) Assume that the *transition entity or the *tax exempt vendor had acquired the *privatised asset at the test time.

Effective life

 (6) Assume that:
 (a) the *transition entity or the *tax exempt vendor had chosen to use an *effective life determined by the Commissioner for the *privatised asset as in force at the *transition time or the *acquisition time; and
 (b) subsection 40‑95(2) did not apply.

 (7) Assume also that section 40‑110 (about recalculating effective life) did not apply.

58‑85  Pre‑existing audited book value of depreciating asset

 (1) A *privatised asset has a pre‑existing audited book value if:
 (a) a balance sheet, as at the end of an annual accounting period (the balance date), that was prepared as part of an *exempt entity's final accounts for that period showed the asset as an asset of the exempt entity and specified a value for it; and
 (b) a qualified independent auditor who was engaged, or was required by law, to undertake an audit of those accounts had prepared and signed, before 4 August 1997, a final audit report on those accounts; and
 (c) the report did not state that the auditor was not satisfied