Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-10 - FINANCIAL TRANSACTIONS  

Division 230 - Taxation of financial arrangements  

Subdivision 230-B - The accruals/realisation methods  

When accruals method or realisation method applies

SECTION 230-100   When accruals method or realisation method applies  

When accruals method applies and when realisation method applies

230-100(1)  
This section tells you when to apply the accruals method and when to apply the realisation method if this Subdivision applies to gains and losses from a *financial arrangement. Accruals method - sufficiently certain overall gain or loss at start time

230-100(2)  


The accruals method provided for in this Subdivision applies to a gain or loss you have from a *financial arrangement if:


(a) the gain or loss is an overall gain or loss from the arrangement; and


(b) the gain or loss is sufficiently certain at the time when you start to have the arrangement; and


(c) you choose to apply the accruals method to the gain or loss, or subsection (4) applies to the gain or loss.

Note:

Subsection 230-105(1) tells you when you have a sufficiently certain overall gain or loss.

Accruals method - sufficiently certain particular gain or loss

230-100(3)  


The accruals method provided for in this Subdivision also applies to a gain or loss you have from a *financial arrangement if:


(a) the gain or loss arises from a *financial benefit that you are to receive or are to provide under the arrangement; and


(b) the gain or loss:


(i) is sufficiently certain before or at the time when you start to have the arrangement and before you are to receive or provide the benefit; or

(ii) becomes sufficiently certain after the time when you start to have the arrangement and before you are to receive or provide the benefit; and


(c) the benefit has not already been taken into account in applying:


(i) the accruals method provided for in this Subdivision; or

(ii) the realisation method provided for in this Subdivision;
to another gain or loss from the arrangement.

This subsection has effect subject to subsection (4).

Note:

Subsection 230-110(1) tells you when you have a sufficiently certain gain or loss at a particular time.

Accruals method - particular gain or loss becomes sufficiently certain

230-100(3A)  


The accruals method provided for in this Subdivision also applies to a gain or loss you have from a * financial arrangement if:


(a) the gain or loss arises from a * financial benefit that you are to receive or are to provide under the arrangement; and


(b) the gain or loss becomes sufficiently certain at the time you receive or provide the benefit; and


(c) at least part of the period over which the gain or loss would be spread under that method (assuming that method applied) occurs after the time you receive or provide the benefit.

This subsection has effect subject to subsection (4).

Note 1:

Subsection 230-110(1) tells you when you have a sufficiently certain gain or loss at a particular time.

Note 2:

For the period over which the gain or loss would be spread, see subsections 230-130(3) to (5) .

Accruals method - particular gain or loss from qualifying security

230-100(4)  


Subsection (3) or (3A) does not apply to a gain or loss that you have from a *financial arrangement if:


(a) you are:


(i) an individual; or

(ii) an entity (other than an individual) that satisfies subsection 230-455(2) , (3) or (4) for the income year in which you start to have the arrangement; and


(b) the arrangement is a *qualifying security; and


(c) you have not made an election under subsection 230-455(7) .

Realisation method - gain or loss not sufficiently certain

230-100(5)  


The realisation method provided for in this Subdivision applies to a gain or loss that you have from a *financial arrangement if the accruals method provided for in this Subdivision does not apply to that gain or loss.
Note:

Section 230-180 tells you how to apply the realisation method to the gain or loss.


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