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Edited version of your private ruling
Authorisation Number: 1012336654994
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Ruling
Subject: Assessable income, allowable deduction and capital allowance
Question 1
Is the amount received assessable income for Entity A under section 6-5 of the Income Tax Assessment Act 1997 (ITAA 1997) in the relevant income year?
Answer
Yes.
Question 2
Did the purchase of equipment give rise to a balancing adjustment amount under sections 40-285 of the ITAA 1997 in the income year in which the balancing adjustment event occurred?
Answer
Yes.
Question 3
Are the lease payments deductible as they are due for payment under section 8-1 of the ITAA 1997?
Answer
Yes.
Question 4(a)
In respect of the subsidy amounts, are they assessable income under section 6-5 of the ITAA 1997?
Answer
Yes.
Question 4(b)
In respect of the subsidy amounts, are they offset against lease payments under section 6-5 of the ITAA 1997?
Answer
No.
Question 5(a)
In respect of the credit note, does it constitute assessable income under section 6-5 of the ITAA 1997?
Answer
No.
Question 5(b)
In respect of the credit note, does it constitute assessable income under section 6-10 of the ITAA 1997?
Answer
No.
Question 5(c)
In respect of the credit note, will the first element of cost of those spare parts purchased be reduced under section 40-180 of the ITAA 1997, to the extent that they are depreciating assets?
Answer
Yes.
Question 5(d)
In respect of the credit note, will the credit give rise to a reduced deduction under section 8-1 of the ITAA 1997 to the extent that those parts are consumables?
Answer
Yes.
Question 6(a)
In respect of the discount provided to Entity A, does it constitute assessable income under section 6-5 of the ITAA 1997?
Answer
No.
Question 6(b)
In respect of the discount provided to Entity A, does it constitute assessable income under section 6-10 of the ITAA 1997?
Answer
No.
Question 6(c)
In respect of the discount provided to Entity A, will the first element of the cost of the parts purchased be reduced under section 40-180 of the ITAA 1997 to the extent that they are depreciating assets?
Answer
Yes.
Question 7(a)
In respect of the contribution by Entity B, does it constitute assessable income under section 6-5 of the ITAA 1997?
Answer
No.
Question 7(b)
In respect of the contribution by Entity B, does it constitute assessable income under section 6-10 of the ITAA 1997?
Answer
No.
Question 7(c)
In respect of the contribution by Entity B, will the first element of the cost of the parts consumed covered by Entity B's contribution be reduced under section 40-180 of the ITAA 1997, to the extent that they are depreciating assets?
Answer
Yes.
Question 8
Did the replacement of the equipment give rise to a balancing adjustment amount to Entity A under section 40-285 of the ITAA 1997 in the income year in which the balancing adjustment event occurred?
Answer
Yes.
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