Incitec Pivot Ltd T.IPL

Primary Symbol: ICPVF

Chemicals Basic Materials

Incitec Pivot Limited is an Australia-based manufacturer and supplier to the resources and agricultural sectors. Its segments include Asia Pacific and Americas. Asia Pacific segment includes Fertilisers Asia Pacific (Fertilisers APAC) and Dyno Nobel Asia Pacific (DNAP). Fertilisers APAC manufactures and sells fertilizers in Eastern Australia and the export market. It also manufactures, imports and sells industrial chemicals to the agricultural sector and other specialist industries. DNAP manufactures and sells industrial explosives and related products and services to the mining industry in the Asia Pacific region, Turkey and France. Americas segment includes Dyno Nobel Americas, which manufactures and sells industrial explosives and related products and services to the mining, quarrying and construction industries in the Americas (Canada, Mexico and Chile) and initiating systems to businesses in Australia, Turkey and South Africa. It also manufactures and sells industrial chemicals.

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Incitec Pivot Ltd

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Post by Ariahpon Jun 10, 2021 7:39am

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Post# 33360900

Example of Section 85.1

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Example: 85.1

John is the shareholder of John Inc. John owns all 1000 of the shares (with ACB/PUC)=$1,000
Alex owns all 1000 of Alex Inc. shares (with ACB/PUC=$2,000)
Alex Inc. wants to buyout John Inc.
Alex Inc. exchanges 500 of its own shares for 1000 shares of John Inc.
Alex Inc. shares are worth $20/share

Without s85.1, John is deemed to have disposed his shares at fair value = $20*500 = 10,000; he will have a capital gain of $9,000 ($10,000-1,000).
With the s85.1 Rollover, the transfer happens at the ACB; therefore, no capital gains.
- New ACB = OLD ACB=$1,000
- The Old PUC gets added to the PUC of Alex Inc. shares; $1,000 will get added to the PUC of Alex Inc. shares; therefore total PUC of Alex Inc. shares = $3,000 (John’s PUC = 3000*500/1500 = $1,000)
- The ACB of John Inc. shares to Alex Inc. equals to the lesser of:
  1. Fair Market Value = 20*500 = $10,000; or
  2. PUC of John Inc. shares = $1,000
    - Therefore ACB of John Inc. shares to Alex Inc. = $1,000