Document ID: chunk:federal_register_of_legislation:C2010C00690:clause:1_6:p4
Version: federal_register_of_legislation:C2010C00690
Segment Type: clause
Provision Reference: sch 1 cl 6 (pt 4/26)
Character Range: 183933–186577

of, or allowable as a deduction to, the *head 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 certain equity interests

 (7) The step 4 amount is increased by the *market value of each thing that, in accordance with *accounting standards, or statements of accounting concepts made by the Australian Accounting Standards Board, is equity in the leaving entity at the leaving time, where the thing is also a *debt interest.

711‑50  Adjustment to allocable cost amount to ensure effect of Subdivision 165‑CC not avoided—step 5 in working out allocable cost amount

When section applies

 (1) This section applies to an asset if:
 (a) the *head company holds the asset at the leaving time because the leaving entity is taken by subsection 701‑1(1) to be a part of the head company; and
 (b) assuming the head company *disposed of the asset at that time for its *market value, the head company would, in respect of the disposal:
 (i) make a *capital loss; or
 (ii) be entitled to a deduction; or
 (iii) make a *trading stock loss;
  and it would be prevented by Subdivision 165‑CC from taking into account or deducting some or all (the denied amount) of that loss or deduction; and
 (c) Subdivision 165‑CC would have that effect other than solely because of the operation of subsection 705‑120(3) (which deems the head company to have owned a percentage of an asset at a time that triggers the operation of Subdivision 165‑CC).

Step 5 amount

 (2) If this section applies, the step 5 amount for the purposes of step 5 in the table in subsection 711‑20(1) is equal to the sum of the denied amounts for all assets to which subsection (1) of this section applies.

Effect on head company's residual unrealised net loss

 (3) Also, for the purposes of any application of Subdivision 165‑CC to:
 (a) a *capital loss made by the *head company; or
 (b) a deduction to which the head company becomes entitled; or
 (c) a *trading stock loss made by the head company;
after the leaving time, the head company's residual unrealised net loss under subsection 165‑115BB(2) is worked out as if the head company had made a capital loss, become entitled to a deduction or made a trading stock loss at the