Commonwealth Consolidated Acts

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Cost of a split depreciating asset

                   If you split a * depreciating asset into separate assets as mentioned in section 40- 115, the first element of the cost of each of the separate assets is a reasonable proportion of the sum of these amounts:

                     (a)  the * adjustable value of the original asset just before it was split; and

                     (b)  the amount you are taken to have paid under section 40-185 for any economic benefit involved in splitting the original asset.

Example:    Barry owns a spectrum licence that covers 3 areas: Area A, area B and area C. The licence has an adjustable value of $160,000. He sells area A to Chris, and his costs of splitting are $10,000. Barry is taken to have split the licence into 2 assets.

                   On the basis of their relative market values, Barry apportions $170,000 to area A (that he disposed of) and to the licence he still holds for areas B and C.

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