(1) This section applies if the re-estimation mentioned in section 230-190 arises because of:
(a) an impairment (within the meaning of the * accounting principles) of:
(i) the * financial arrangement; or
(ii) a financial asset or financial liability that forms part of the arrangement; or
(b) a reversal of an impairment loss (within the meaning of the accounting principles) that resulted from such an impairment.
(2) Despite paragraph 230-190(6)(a), you must make the fresh allocation in accordance with paragraph 230-190(6)(b).
(3) You cannot deduct a loss you make for an income year under section 230-15, to the extent that the loss results from:
(a) the impairment (including as affected by any later reversal of the impairment loss that resulted from the impairment); or
(b) the operation of subsection (7).
(4) Disregard subsection (3) for the purposes of paragraph (c) of step 1 of the method statement in subsection 230-445(1).
(5) Subsections (7) and (8) apply to the part of the gain or loss that is to be reallocated in accordance with paragraph 230-190(6)(b), if:
(a) the fresh determination under paragraph 230-190(5)(a) that arose because of the reversal resulted in that part being a gain; and
(b) there are losses that:
(i) resulted from the impairment; and
(ii) you could have deducted apart from subsection 230-172(2) or subsection (3) of this section.
(6) Paragraph (5)(b) does not apply to a loss to the extent that:
(a) the loss reflects the amount of a loss you make under paragraph 230-195(1)(b) or (c); and
(b) the loss you make under paragraph 230-195(1)(b) or (c) relates to you writing off, as a bad debt, a right to receive a * financial benefit (or a part of a financial benefit).
(7) Treat the fresh determination as having resulted in that part being a loss, if the total of the losses mentioned in paragraph (5)(b) of this section exceeds the amount of the gain mentioned in paragraph (5)(a). The amount of the loss is equal to the amount of the excess.
(8) Otherwise, reduce the amount of that gain by the total of those losses.