Document ID: chunk:federal_register_of_legislation:C2025C00029:section:4:p23
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 4 (pt 23/55)
Character Range: 3855353–3857937

conditions of the arrangement in working out the period to which the gain or loss relates. This subsection has effect subject to subsections (4) and (5).
 (4) The start of the period over which a gain or loss to which subsection (3) applies is to be spread must:
 (a) not start earlier than the time when you start to have the *financial arrangement; and
 (b) other than in the case of a gain or loss to which subsection 230‑100(3A) or subsection (4A) of this section applies—not start earlier than the start of the income year during which it becomes sufficiently certain that you will make the gain or loss.
 (4A) This subsection applies to a gain or loss to which subsection (3) applies, if:
 (a) there is an impairment (within the meaning of the *accounting principles) of:
 (i) the *financial arrangement; or
 (ii) a financial asset or financial liability that forms part of the arrangement; and
 (b) because of the impairment, you make a reassessment under section 230‑185 in relation to the arrangement; and
 (c) you determine on the reassessment that the gain or loss is not sufficiently certain (whether or not the gain or loss was sufficiently certain before the reassessment); and
 (d) there is a reversal of the impairment loss (within the meaning of the accounting principles) that resulted from the impairment; and
 (e) because of the reversal, you make a reassessment under section 230‑185 in relation to the arrangement; and
 (f) you determine on the reassessment that the gain or loss has become sufficiently certain.
Note: For the income years to which the gain or loss is allocated, see section 230‑170.
 (5) The end of the period over which a gain or loss to which subsection (3) applies is to be spread must not end later than the time when you will cease to have the *financial arrangement.

230‑135  How gain or loss is spread

How to spread gain or loss
 (1) This section tells you how to spread a gain or loss to which the accruals method applies.

Compounding accruals or approximation
 (2) The gain or loss is to be spread using:
 (a) compounding accruals; or
 (b) a method whose results approximate those obtained using the method referred to in paragraph (a) (having regard to the length of the period over which the gain or loss is to be spread).
 (3) The following subsections of this section clarify the way in which the gain or loss is to be spread in accordance with paragraph (2)(a).

Intervals to which parts of gain or loss allocated
 (4) The intervals to which parts of the gain or loss are allocated must:
 (a) not exceed 12 months; and
 (b) all