INCOME TAX ASSESSMENT ACT 1997 - SECT 58.80 Meaning of undeducted pre - existing audited book value

INCOME TAX ASSESSMENT ACT 1997 - SECT 58.80

  (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.