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Company A ('CoA'), a service provider entity, owns an asset ('the asset') containing significant amounts of knowledge and/or information, for example, a client list, which it has either acquired or created. 2. CoA claims that copyright subsists in the asset and that it also owns the copyright. In some cases, the asset has been disaggregated in an attempt to come within the low value pooling of depreciable asset provisions of Subdivision 40-E of the ITAA 1997. 3. CoA is an eligible member of a group of companies that consolidate, or joins an existing consolidated group. 4. In some cases, prior to consolidation, CoA has not identified the copyright as a valuable asset for accounting or tax purposes. 5. The head company ('HeadCo') of the consolidated group identifies the copyright as a reset cost base asset. 6. HeadCo purports to ascribe a market value to the copyright which has been determined by reference to some or all of the market value of the asset. 7. In some cases, no appropriate methodology for valuing the copyright has been applied by HeadCo. 8. The allocable cost amount for CoA, calculated in accordance with the consolidation legislation, is allocated proportionally to the asset with reference to its market value. 9. HeadCo works out the tax cost setting amount for the copyright to be an inflated amount reflecting some or all of the value of the asset. 10. HeadCo then claims a deduction under Division 40 of the ITAA 1997 for the decline in value of the copyright based on the inflated tax cost setting amount.