Document ID: chunk:federal_register_of_legislation:C2025C00029:section:5:p15
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 5 (pt 15/32)
Character Range: 1418905–1421615

did not apply.
 (5A) Assume that section 40‑102 did not apply to a *privatised asset unless all of the following are satisfied:
 (a) it is an entity sale situation within the meaning of section 58‑5;
 (b) a *capped life applies to the asset under subsection 40‑102(4) or (5) at both the asset's *start time and the *transition time;
 (c) the *transition entity chooses, for the purposes of this section, to have section 40‑102 apply to the asset.
If section 40‑102 is to be applied to the asset, disregard paragraphs 40‑102(2)(a) and (b) and assume that the relevant time for the purposes of the application of that section to the asset were the transition time.
 (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.
Note: Section 40‑102 does not apply to a privatised asset for the purposes of this section.
 (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