Income Tax Assessment Act 1997
View history note
Hide history noteSECTION 820-640 The 3 measurement days method
Application
820-640(1)
An entity must not use the 3 measurement days method for a period that is a part of an income year unless the following days occur during that period:
(a) the last day of the first half of the income year;
(b) one or both of the following days:
(i) the first day of that year;
(ii) the last day of that year.
Method statement
820-640(2)
An entity that uses the 3 measurement days method for a period must apply the following method statement to calculate the average value of a matter for that period. Method statement
Step 1.
Work out the value of the particular matter as at the first measurement day (see subsection (3)).
Step 2.
Work out the value of the particular matter as at the second measurement day (see subsection (3)).
Step 3.
Work out the value of the particular matter as at the third measurement day (see subsection (3)).
Step 4.
Add the results of steps 1, 2 and 3.
Step 5.
Divide the result of step 4 by 3. The result of this step is the average value.
Example:
RJ Corporation held assets valued at $115 million on the first day of an income year. It held assets valued at $105 million on the last day of the first half of that year, and $80 million on the last day of that year. Adding these amounts and dividing the result by 3 gives the average value of its assets for that year, which is $100 million.
Measurement days
820-640(3)
The following are the first , second and third measurement days :
(a) the first measurement day is the first day of the income year if it occurs during that period, otherwise it is the first day of that period;
(b) the second measurement day is the last day of the first half of that year;
(c) the third measurement day is the last day of that year if it occurs during that period, otherwise it is the last day of that period.
Disclaimer and notice of copyright applicable to materials provided by CCH Australia Limited
CCH Australia Limited ("CCH") believes that all information which it has provided in this site is accurate and reliable, but gives no warranty of accuracy or reliability of such information to the reader or any third party. The information provided by CCH is not legal or professional advice. To the extent permitted by law, no responsibility for damages or loss arising in any way out of or in connection with or incidental to any errors or omissions in any information provided is accepted by CCH or by persons involved in the preparation and provision of the information, whether arising from negligence or otherwise, from the use of or results obtained from information supplied by CCH.
The information provided by CCH includes history notes and other value-added features which are subject to CCH copyright. No CCH material may be copied, reproduced, republished, uploaded, posted, transmitted, or distributed in any way, except that you may download one copy for your personal use only, provided you keep intact all copyright and other proprietary notices. In particular, the reproduction of any part of the information for sale or incorporation in any product intended for sale is prohibited without CCH's prior consent.
