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INCOME TAX ASSESSMENT ACT 1997 - SECT 820.630

Methods of calculating average values

Methods of calculation for entities that are not ADIs

             (1)  An entity to which Subdivision 820-B or 820-C applies for a period that is all or a part of an income year must use one of the following methods to calculate the average value of a matter mentioned in that Subdivision for the purposes of that application:

                     (a)  the method set out in section 820-635 (the opening and closing balances method );

                     (b)  the method set out in section 820-640 (the 3 measurement days method );

                     (c)  the method set out in section 820-645 (the frequent measurement method ).

Note 1:       This subsection therefore applies only to an outward investing entity (non-ADI) or an inward investing entity (non-ADI).

Note 2:       An entity cannot apply the 3 measurement days method if it is unable to meet the requirements in subsection 820-640(1). An entity's ability to apply that method may therefore be limited.

             (2)  The entity must use the same method to calculate all such average values for that period for the purposes of that application.

Commissioner's power

             (3)  If the entity fails to comply with subsection (2), the Commissioner may, irrespective of the methods used by the entity, recalculate all the average values for the entity and that period by using the opening and closing balances method.

Method of calculation for ADIs

             (4)  An entity to which Subdivision 820-D or 820-E applies for a period that is all or a part of an income year must use the frequent measurement method to calculate the average value of a matter mentioned in that Subdivision for the purposes of that application.

Note:          This subsection therefore applies only to an outward investing entity (ADI) or an inward investing entity (ADI).



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