Document ID: chunk:federal_register_of_legislation:C2025C00029:section:4:p38
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 4 (pt 38/55)
Character Range: 3891400–3893916

of this section exceeds the amount of the gain mentioned in paragraph (5)(a). The amount of the loss is equal to the amount of the excess.
 (8) Otherwise, reduce the amount of that gain by the total of those losses.

230‑195  Balancing adjustment if rate of return maintained on re‑estimation
 (1) If you make a fresh allocation of the gain or loss on the basis referred to in paragraph 230‑190(6)(a), you must make the following balancing adjustment:
 (a) if you re‑estimate a gain and the amount to which you apply the rate of return increases—you make a gain from the *financial arrangement, for the income year in which you make the re‑estimation, equal to the amount of the increase;
 (b) if you re‑estimate a gain and the amount to which you apply the rate of return decreases—you make a loss from the arrangement, for the income year in which you make the re‑estimation, equal to the amount of the decrease;
 (c) if you re‑estimate a loss and the amount to which you apply the rate of return increases—you make a loss from the arrangement, for the income year in which you make the re‑estimation, equal to the amount of the increase;
 (d) if you re‑estimate a loss and the amount to which you apply the rate of return decreases—you make a gain from the arrangement, for the income year in which you make the re‑estimation, equal to the amount of the decrease.
 (2) Subsection (3) applies if:
 (a) the re‑estimation is made wholly or partly on the basis that you have written off, as a bad debt, a right to receive a *financial benefit (or a part of a financial benefit); and
 (b) the right:
 (i) is not one in respect of money that you lent in the ordinary course of your *business of lending money; and
 (ii) is not one that you bought in the ordinary course of your business of lending money.
 (3) The balancing adjustment to be made under paragraph (1)(b), to the extent that it relates to the writing off of the bad debt, must not exceed so much of the gain in relation to the *financial arrangement as:
 (a) has been assessed under this Division; and
 (b) is reasonably attributable to the *financial benefit (or the part of the financial benefit).
 (4) Subsection (5) applies if:
 (a) the re‑estimation is made wholly or partly on the basis that you have written off, as a bad debt, a right to receive a *financial benefit; and
 (b) the right is one that you bought in the ordinary course of your *business of lending money.
 (5) The balancing adjustment to be made under paragraph (1)(b), to the extent