Item 11 - Consolidation deductions

Consolidation deductions relating to rights to future income, consumable stores and WIP

You should only complete this item if the head company of a consolidated group or a MEC group (or for deductions claimed under section 716-405 by a former subsidiary of a consolidated group or a MEC group) has, in this income year, claimed all or part of a cost setting amount at item 6 Calculation of total profit or loss or item 7 Reconciliation to taxable income or loss, of:

• Unbilled income assets, consumable stores or assets where subsection 701-55(6) of the ITAA 1997 applies under the pre-rules.

• Rights to future income assets, consumable stores or assets where subsection 701-55(6) of the ITAA 1997 applies under the interim rules, or

• Work in progress (WIP) amount assets, consumable stores or assets where subsection 701-55(6) of the ITAA 1997 applies under the prospective rules

For information on consolidation consult the Consolidation Reference Manuals on the ATO website or for a briefer summary, see the NAT0656 Company tax return instructions.

Tax Laws Amendment (2012 Measures No. 2) Act 2012 (TLAA 2 2012) received Royal Assent on 29 June 2012. Schedule 3 to TLAA 2 2012 amends the consolidation provisions in the income tax law to modify the consolidation tax cost setting and rights to future income rules.

The amendments enacted by Schedule 3 of TLAA 2 2012 modify the tax cost setting rules to ensure that tax outcomes for consolidated groups are more consistent with the tax outcomes that arise when assets are acquired outside the consolidation regime.

The labels at item 11 are:

• Label D - Pre-rules deductions.

• Label E - Interim rules deductions.

• Label F - Prospective rules deductions.

These labels will be open for data entry when ‘Head Company’ has been selected at label Z on the Front Cover.

Click these labels to enter details or dissect amounts in Generic Schedule / Worksheets.