Denko Pty Ltd manufactures performance motor cycles. During the year, it determined that it could not collect payment in respect of a motor bike it sold to a dealer three years ago. Since then, the company no longer manufactures performance motor cycles and instead makes motorised scooters.

Describe the source of Australian tax law which would determine if the company can claim a deduction for the bad debt write off.

Task outcome: Describe the key sources of information and taxable transactions data required to calculate taxable income, including: allowable deductions; capital gains; financial adjustments such as write-offs and revaluations; income; payments; purchases; superannuation payments.