To adjust for certain impacts of the 2005 adoption of Australian equivalents to International Financial Reporting Standards, the thin capitalisation regime was modified in relation to the use of accounting standards for identifying and valuing an entity's assets, liabilities and equity capital. It does this by providing for the accounting standard treatment of specified assets and liabilities to be disregarded in certain circumstances. These modifications only apply to non-ADI entities.
Circumstances in which certain assets and liabilities are not permitted to be recognised by particular entities for thin capitalisation purposes relate to deferred tax assets and liabilities within the scope of AASB 112 Income taxes, and assets and liabilities arising from defined benefit plans within the scope of AASB 119 Employment Benefits.
See also:
- section 820-682 of the ITAA 1997.
In addition, particular entities may choose to recognise or revalue certain intangible assets, contrary to the relevant accounting standard. This primarily relates to intangible assets within the scope of AASB 138 Intangible Assets.
See also:
- sections 820-683 and 820-684 of the ITAA 1997.
These modifications are applicable to an entity from its first income year starting on or after 9 December 2008.
The thin capitalisation regime was modified in relation to the use of accounting standards for identifying and valuing an entity's assets, liabilities and equity capital. It does this by providing for the accounting standard treatment of specified assets and liabilities to be disregarded in certain circumstances. These modifications only apply to non-ADI entities.