Income Tax Assessment Act 1997

Part 3-90 inserted by No 68 of 2002, s 3 and Sch 1 item 2, effective 24 October 2002 and applicable on and after 1 July 2002 (see sec 700-1 of the Income Tax (Transitional Provisions) Act 1997 ).

Div 701 inserted by No 68 of 2002, s 3 and Sch 1 item 2, effective 24 October 2002 and applicable on and after 1 July 2002 (see sec 700-1 of the Income Tax (Transitional Provisions) Act 1997 ).

S 701-63 substituted by No 99 of 2012, s 3 and Sch 3 item 33, effective 29 June 2012. For application provisions see note under s 701-55(5C) . S 701-63 formerly read:

SECTION 701-63 Asset forming part of goodwill, right to future income, etc.  
701-63(1)
Subsection (2) applies if an entity (the joining entity ) became a subsidiary member of a * consolidated group at a time (the joining time ).

701-63(2)
For the purposes of this Part (other than this section):

(a) treat goodwill of a business of the joining entity as a single asset; and

(b) treat an asset of that business of the joining entity that is an * asset forming part of goodwill as being part of that single asset; and

(c) as a result of paragraph (b), do not treat an asset of that business of the joining entity that is an asset forming part of goodwill as a separate asset.

701-63(3)
An asset forming part of goodwill means any of the following:

(b) a customer relationship asset, know-how asset or other accounting intangible asset, that is not any of the following:

(i) a * CGT asset;

(ii) a * revenue asset;

(iii) a * depreciating asset;

(iv) * trading stock;

(v) a thing that is or is part of a * Division 230 financial arrangement;

(vi) goodwill;

(vii) an excluded asset for the purposes of section 705-35 ;

(c) a * non-deductible right to future income.

701-63(4)
A * right to future income that is a right of an entity under a contract or agreement with another entity (the customer) is a non-deductible right to future income in relation to the entity to the extent that the value of the right to future income:

(a) is contingent on the renewal of the contract or agreement; or

(b) is attributable to a period (if any) during which the customer can unilaterally cancel the contract or agreement without paying compensation or a penalty; or

(c) if there is a period during which the customer can unilaterally cancel the contract or agreement, but must pay compensation or a penalty - is attributable to that period, but not to that compensation or penalty.

701-63(5)
A right to future income is a valuable right (including a contingent right) to receive an amount for the performance of work or services or the provision of goods (other than * trading stock) if:

(a) the valuable right forms part of a contract or agreement; and

(b) the * market value of the valuable right (taking into account all the obligations and conditions relating to the right) is greater than nil; and

(c) the valuable right is neither a * Division 230 financial arrangement nor a part of a Division 230 financial arrangement.

S 701-63 substituted by No 99 of 2012, s 3 and Sch 3 item 19, effective 29 June 2012. For application provisions see note under s 701-55(5C) . S 701-63 formerly read:

SECTION 701-63 Asset forming part of goodwill, right to future income, etc.  
701-63(1)
Subsection (2) applies if an entity (the joining entity ) became a subsidiary member of a * consolidated group at a time (the joining time ).

701-63(2)
For the purposes of this Part (other than this section):

(a) treat goodwill of a business of the joining entity as a single asset; and

(b) treat an asset of that business of the joining entity that is an * asset forming part of goodwill as being part of that single asset; and

(c) as a result of paragraph (b), do not treat an asset of that business of the joining entity that is an asset forming part of goodwill as a separate asset.

701-63(3)
An asset forming part of goodwill means any of the following:

(a) an intangible asset, the value of which is attributable to expected future profits from * life insurance policies or * general insurance policies;

(b) a customer relationship asset, know-how asset or other accounting intangible asset, that is not any of the following:

(i) a * CGT asset;

(ii) a * revenue asset;

(iii) a * depreciating asset;

(iv) * trading stock;

(v) a thing that is or is part of a * Division 230 financial arrangement;

(vi) goodwill;

(vii) an excluded asset for the purposes of section 705-35;

(c) a * non-deductible right to future income.

701-63(4)
A non-deductible right to future income is a * right to future income that is not an * unbilled income asset.

701-63(5)
A right to future income is a valuable right (including a contingent right) to receive an amount for the performance of work or services or the provision of goods if:

(a) the valuable right forms part of a contract or agreement; and

(b) the * market value of the valuable right (taking into account all the obligations and conditions relating to the right) is greater than nil; and

(c) the valuable right is neither a * Division 230 financial arrangement nor part of a Division 230 financial arrangement.

701-63(6)
An asset that is a * right to future income is an unbilled income asset if:

(a) the asset:

(i) is in respect of work (but not goods) that has been performed, or partially performed, by an entity for another entity; or

(ii) is in respect of goods (other than * trading stock) or services that have been provided, by an entity to another entity; and

(b) a recoverable debt has not yet arisen in respect of the work, goods or services.

S 701-63 inserted by No 99 of 2012, s 3 and Sch 3 item 6, effective 29 June 2012. For application provisions see note under s 701-55(5C) .