INCOME TAX ASSESSMENT ACT 1997 - SECT 713.710 Treatment of liabilities and reserves for income year when general insurance company joins or leaves group
INCOME TAX ASSESSMENT ACT 1997 - SECT 713.710
Treatment of liabilities and reserves for income year when general insurance company joins or leaves groupSections 713 - 715 and 713 - 720 affect how sections 321 - 10, 321 - 15, 321 - 50 and 321 - 55 (the affected sections ) apply in relation to these values (the affected values ):
(a) the value of the outstanding claims liability of a * general insurance company under * general insurance policies that is worked out under section 321 - 20;
(b) the value of the unearned premium reserve of a general insurance company under general insurance policies that is worked out under section 321 - 60.
Note 1: Sections 321 - 10 and 321 - 15 both operate on the basis of a comparison of the value of the outstanding claims liability of a general insurance company at the end of the current year with the value of that liability at the end of the previous income year, so that:
(a) section 321 - 10 includes an amount in the company's assessable income for the current year if the value at the end of the current year is less than the value at the end of the previous income year; and
(b) section 321 - 15 allows a deduction for the current year if the value at the end of the current year is more than the value at the end of the previous income year.
Note 2: Sections 321 - 50 and 321 - 55 both operate on the basis of a comparison of the value of the unearned premium reserve of a general insurance company at the end of the current year with the value of that reserve at the end of the previous income year, so that:
(a) section 321 - 50 includes an amount in the company's assessable income for the current year if the value at the end of the current year is less than the value at the end of the previous income year; and
(b) section 321 - 55 allows a deduction for the current year if
the value at the end of the current year is more than the value at the end of
the previous income year.