Document ID: chunk:federal_register_of_legislation:C2014C00703:clause:1_2:p7
Version: federal_register_of_legislation:C2014C00703
Segment Type: clause
Provision Reference: sch 1 cl 2 (pt 7/11)
Character Range: 46728–49570

other entities for the purposes of subsection (1) are as follows:
 (a) an entity *connected with the recipient;
 (b) an *affiliate of the recipient or an entity of which the recipient is an affiliate.

Subdivision 355‑H—Feedstock adjustments

Table of sections
355‑460 What this Subdivision is about
355‑465 Feedstock adjustment to assessable income
355‑470 Feedstock revenue
355‑475 Application to connected entities and affiliates

355‑460  What this Subdivision is about
      An amount is included in an R&D entity's assessable income if it can deduct under this Division expenditure on goods, materials or energy used during R&D activities to produce:

                (a) marketable products; or
                (b) products applied to the R&D entity's own use.

355‑465  Feedstock adjustment to assessable income
 (1) This section applies to an *R&D entity for an income year (the present year) if:
 (a) it incurs expenditure in one or more income years in acquiring or producing goods, or materials, (the feedstock inputs) transformed or processed during *R&D activities in producing one or more tangible products (the feedstock outputs); and
 (b) it obtains under section 355‑100 *tax offsets for one or more income years for deductions under this Division:
 (i) for the expenditure; or
 (ii) for expenditure it incurs on any energy input directly into the transformation or processing; or
 (iii) for the decline in value of assets used in acquiring or producing the feedstock inputs; and
 (c) during the present year, a feedstock output, or a transformed feedstock output, (the marketable product) is:
 (i) *supplied by the R&D entity to another entity; or
 (ii) applied by the R&D entity to the R&D entity's own use, other than use for the purpose of transforming that product for supply.
 (2) The *R&D entity's assessable income for the present year includes an amount equal to 1/3 of the lesser of:
 (a) the *feedstock revenue for the feedstock output; and
 (b) so much of the total of the amounts deducted as described in paragraph (1)(b) that is reasonably attributable to the production of the feedstock output.
Note: This subsection applies separately for each of the feedstock outputs.
 (3) Subsection (2) does not apply to the feedstock output if:
 (a) it becomes, or is transformed into, a feedstock input; or
 (b) that subsection already applies to the feedstock output because of the application of paragraph (1)(c) to:
 (i) an earlier time during the present year; or
 (ii) an earlier income year.

355‑470  Feedstock revenue
  The feedstock revenue, for the feedstock output, is worked out as follows:
where:
market value of the marketable product means the marketable product's *market value at the time it is:
 (a) *supplied by the *R&D entity to the other entity; or
 (b) first applied by the R&D entity to the R&D