Commonwealth Consolidated Acts Commonwealth Consolidated Acts(1) This section applies to an * R&D entity if:
(a) a * balancing adjustment event happens in an income year (the event year ) for an asset * held by the R&D entity; and
(b) the R&D entity cannot deduct an amount under section 40- 25, as that section applies apart from:
(i) this Division; and
(ii) former section 73BC of the Income Tax Assessment Act 1936 ;
for the asset for an income year; and
(c) the R&D entity is entitled under section 355-100 to * tax offsets for one or more income years for deductions (the R&D deductions ) under section 355- 305 for the asset; and
(d) the entity is registered under section 27A of the Industry Research and Development Act 1986 for one or more * R&D activities for the event year; and
(e) if Division 40 applied with the changes described in section 355- 310:
(i) the entity could deduct for the event year an amount under subsection 40- 285(2) for the asset and the balancing adjustment event; or
(ii) an amount would be included in the entity's assessable income for the event year under subsection 40- 285(1) for the asset and the balancing adjustment event.
Note 1: This section applies in a modified way if the entity also has deductions for the asset under former section 73BA or 73BH of the Income Tax Assessment Act 1936 (see section 355-320 of the Income Tax (Transitional Provisions) Act 1997 ).
Note 2: Section 40-292 applies if the entity can deduct an amount under section 40- 25, as that section applies apart from this Division and former section 73BC of the Income Tax Assessment Act 1936 .
Notional deduction
(2) If the * R&D entity could deduct for the event year an amount under subsection 40- 285(2) for the asset and the event if Division 40 applied as described in paragraph (1)(e), the R&D entity can deduct that amount for the event year.
Amount to be included in assessable income
(3) If an amount (the section 40- 285 amount ) would be included in the * R&D entity's assessable income for the event year under subsection 40- 285(1) for the asset and the event if Division 40 applied as described in paragraph (1)(e), the sum of that amount and the following amount is included in the R&D entity's assessable income for the event year:
where:
adjusted section 40- 285 amount means so much of the section 40- 285 amount as does not exceed the total decline in value.
"total decline in value" means the asset's * cost, less its * adjustable value, worked out under Division 40 as it applies as described in paragraph (1)(e).
Table of sections
355-400 Expenditure incurred while not at arm's length
355-405 Expenditure not at risk
355-410 Disposal of R&D results
355-415 Reducing deductions to reflect mark-ups within groups