Show download pdf controls
  • COVID-19 and loss utilisation

    We understand the way some businesses operate has been impacted as a result of COVID-19.

    Some of these impacts may have resulted in changes that affect whether they are able to utilise their carried-forward losses in the current or a future income year.

    For companies to utilise their carried-forward losses in a particular year, they need to satisfy the continuity of ownership test (COT). If they fail the COT, they need to satisfy the business continuity test (BCT).

    Examples of COVID-19 impacts on companies include where it suddenly changes its business model or activities, or where a company closes its business. Whether a company can utilise carried-forward losses requires a consideration of its facts and circumstances.

    Generally, a company that has completely closed its business with no intention to resume will fail the BCT. However, a company that has temporarily closed its business may still be able to satisfy the BCT.

    The mere receipt of JobKeeper payments will not cause a company to fail the BCT.

    We have updated our web guidance to provide further clarification.

    More information:

    Last modified: 22 Oct 2020QC 64070