The taxpayer, Components R Us Pty. Ltd., manufactures and sells car components. In 2016 it entered into a ten-year market sharing contract with XYZ, a company in China, whereby Components R Us agreed not to distribute its products in China and XYZ agreed not to distribute its products in Australia.

In January 2021 XYZ Ltd. paid Components R Us $20 million to terminate the 2016 contract. In return for receiving the $20 million, Components R Us agreed to give up its exclusive distribution rights in Australia. The $20 million was based on the estimation of the profit that Components R Us thought it would lose by allowing XYZ to compete with it in the Australian market.

Advise Components R Us as to whether the amount it has received as compensation constitutes assessable income. Refer to case law and statutory provisions in your answer