Income Tax Assessment Act 1997
SECTION 40-295 Meaning of balancing adjustment event 40-295(1)
A balancing adjustment event occurs for a * depreciating asset if:
(a) you stop * holding the asset; or
(b) you stop using it, or having it * installed ready for use, for any purpose and you expect never to use it, or have it installed ready for use, again; or
(c) you have not used it and:
(i) if you have had it installed ready for use - you stop having it so installed; and
(ii) you decide never to use it.
Note:
A balancing adjustment event occurs under paragraph 40-295(1)(a) when you start holding a depreciating asset as trading stock.
40-295(1A)
A balancing adjustment event occurs for a *depreciating asset you *hold that is a *mining, quarrying or prospecting right, or *mining, quarrying or prospecting information, if:
(a) the only reason that subsection 40-80(1) does not apply to the right or information is that the right or information does not meet the requirements of paragraph 40-80(1)(d) or (e) ; and
(b) you have neither budgeted nor planned for further expenditure that:
(i) will relate to the tenement to which the right or information relates; and
(ii) will exceed the minimum expenditure required to maintain the tenement; and
(c) you choose to apply this subsection to the right or information.
40-295(1B)
A balancing adjustment event occurs for a *depreciating asset you *hold that is a *mining, quarrying or prospecting right, or *mining, quarrying or prospecting information, if:
(a) since the last time you commenced to hold the right or information, a *balancing adjustment event occurred, because of subsection (1A), to the right or information; and
(b) paragraph (1A)(b) no longer applies.
40-295(2)
A balancing adjustment event occurs for a * depreciating asset if:
(a) for any reason, a change occurs in the * holding of, or in the interests of entities in, the asset; and
(b) the entity or one of the entities that had an interest in the asset before the change has an interest in it after the change; and
(c) the asset was a partnership asset before the change or becomes one as a result of the change.
40-295(3)
However, a balancing adjustment event does not occur for a * depreciating asset merely because you split it into 2 or more depreciating assets or you merge it with one or more other depreciating assets.
Note:
A balancing adjustment event will occur if you stop holding part of a depreciating asset.
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