Commonwealth Consolidated Acts Commonwealth Consolidated Acts(1) This section has effect for the head company core purposes when the entity becomes a * subsidiary member of the group.
Object
(2) The object of this section is to preserve any entitlement to accelerated depreciation for assets that become those of the * head company because subsection 701‑1(1) (the single entity rule) applies when the entity becomes a * subsidiary member of the group. This is only to apply where the asset’s * tax cost setting amount is not more than the entity’s * terminating value for the asset.
Section applies to certain depreciating assets
(3) This section applies if:
(a) the entity * acquired a * depreciating asset at or before 11.45 am, by legal time in the Australian Capital Territory, on 21 September 1999 and held the asset continuously until the entity became a * subsidiary member of the group; and
(b) the * tax cost setting amount that applies in relation to the asset for the purposes of section 701‑10 when it becomes an asset of the * head company because subsection 701‑1(1) (the single entity rule) applies is not more than the entity’s * terminating value for the asset.
Preservation of accelerated depreciation
(4) While the asset is held by the * head company under subsection 701‑1(1) (the single entity rule), the decline in its value under Division 40 is worked out by replacing the component in the formula in subsection 40‑70(1) or 40‑75(1) that includes the asset’s * effective life with the rate that would apply under subsection 42‑160(1) or 42‑165(1) of this Act if it had not been amended by the New Business Tax System (Capital Allowances) Act 2001 .