Document ID: chunk:federal_register_of_legislation:C2025C00029:section:4:p31
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 4 (pt 31/55)
Character Range: 3874391–3877003

the meaning of the *accounting principles) of:
 (i) a *financial arrangement; or
 (ii) a financial asset or financial liability that forms part of a financial arrangement; and
 (b) you make a loss from the financial arrangement as a result of the impairment; and
 (c) the accruals method applies to the loss.
 (2) You cannot deduct a loss you make for an income year under section 230‑15, to the extent that the loss results from the impairment (including as affected by any later reversal of the impairment loss (within the meaning of the *accounting principles) that resulted from the impairment).
 (3) Disregard subsection (2) for the purposes of paragraph (c) of step 1 of the method statement in subsection 230‑445(1).

230‑175  Running balancing adjustments

Overestimate of financial benefit to be received
 (1) You are taken for the purposes of this Division to make a loss from a *financial arrangement if:
 (a) a provision of this Subdivision has applied on the basis that you were sufficiently certain, at a particular time, to receive a *financial benefit of, or of at least, a particular amount under the arrangement; and
 (b) when you receive the benefit (or the time comes for you to receive the benefit), the amount you receive (or are to receive) is nil or is less than the amount estimated.
The amount of the loss is equal to the difference between the amount estimated and the amount you receive (or are to receive). You are taken to have made the loss for the income year in which you receive the benefit (or in which the time comes for you to receive the benefit).
 (1A) Subsection (1) does not apply to the extent that the difference results from:
 (a) 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; or
 (b) you writing off, as a bad debt, a right to a *financial benefit (or a part of a financial benefit).

Underestimate of financial benefit to be received
 (2) You are taken for the purposes of this Division to make a gain from a *financial arrangement if:
 (a) a provision of this Subdivision has applied on the basis that you were sufficiently certain at a particular time to receive a *financial benefit of, or of at least, a particular amount under the arrangement; and
 (b) when you receive the benefit, or the time comes for you to receive the benefit, the amount you receive, or are to receive, is more than the amount estimated.
The amount of the gain is equal to the difference between the amount estimated and the amount you receive or