Scenario: Company structure
Profit on sale of asset $100K
Taxable income after using small business CGT concessions $50k
How do we treat the remaining $50k in the financial statements?
Also the CGT concession $50k, would that be posted in a reserve account (under profit & loss appropriation)?
Any help would be appreciated.
Hi @aakash19,
In the financial statements, the full $100,000 profit on sale is recorded because it reflects the true gain on the asset. The CGT concession only affects how much of that profit is taxed, not how much profit is reported.
The small business CGT concessions reduce your taxable capital gain, not your accounting profit. The $50,000 reduction from the active asset reduction doesn't create a separate amount to record in the financial statements and isn't transferred to a reserve.
The small business CGT concessions are applied in a specific order. First, you determine whether the small business 15-year-exemption applies. If it doesn't, you then apply any capital losses, the CGT discount (if eligible), and the 50% active asset reduction.
The resulting $50,000 taxable gain is included in the company’s tax return.
Thanks Rachel for your response.
7 Apr 2026 · 2 min read time
22 Apr 2024 · 3 min read time
15 Apr 2026 · 4 min read time
32 views
2 replies