Prior-period expenditure is deductible in the year liability crystallises after restructuring-related reconciliation of transferred assets and liabilities.

Prior-period expenditure arising from reconciliation of assets, liabilities and common expenditure transferred on restructuring is deductible in the year when the liability crystallises. The issue had already been resolved in favour of the assessee in an earlier decision, and review of that decision was rejected. The stated legal position therefore allows deduction of such expenditure in the crystallisation year.

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Issues: Whether prior-period expenditure was deductible in the year in which the liability crystallised.

Analysis: The prior-period expenditure arose from reconciliation of assets, liabilities and common expenditure transferred upon restructuring. The issue stood concluded in favour of the assessee by an earlier decision, whose review had also been rejected.

Conclusion: Prior-period expenditure was allowable in the year of crystallisation, in favour of the assessee.

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