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Primary production aggregation for sole traders 043-04100010

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This page contains an example of an apportionment calculation of a mixed asset.

Examples

Apportionment calculation of a mixed asset

This table describes an example of an apportionment calculation of a mixed asset.

Item

Example

1
  • Value of the whole farm property (primary production and non-primary production 'mixed assets') = $450,000
  • Deduct value of the home and curtilage = $150,000
  • Equals value of primary production asset = $300,000
  • Liability related to the whole farm property = $240,000

Proportion of liability that is the primary production liability:

= liability (whole property) x (value of 'mixed asset' - value of home and curtilage) ÷ value of 'mixed asset'

= $240,000 x ($450,000 - $150,000) ÷ $450,000

= $160,000

If there are no other primary production assets or liabilities, the net primary production asset is: $300,000 - $160,000 = $140,000.