(1) A depreciating asset is an asset that has a limited * effective life and can reasonably be expected to decline in value over the time it is used, except:
(a) land; or
(b) an item of * trading stock; or
(c) an intangible asset, unless it is mentioned in subsection (2).
(2) These intangible assets are depreciating assets if they are not * trading stock:
(a) * mining, quarrying or prospecting rights;
(b) * mining, quarrying or prospecting information;
(c) items of * intellectual property;
(d) * in-house software;
(e) * IRUs;
(f) * spectrum licences;
(g) * datacasting transmitter licences;
(h) * telecommunications site access rights.
(3) This Division applies to an improvement to land, or a fixture on land, whether the improvement or fixture is removable or not, as if it were an asset separate from the land.
Note 1: Whether such an asset is a depreciating asset depends on whether it falls within the definition in subsection (1).
Note 2: This Division does not apply to capital works for which you can deduct amounts under Division 43: see subsection 40-45(2).
(4) Whether a particular composite item is itself a depreciating asset or whether its components are separate depreciating assets is a question of fact and degree which can only be determined in the light of all the circumstances of the particular case.
Example 1: A car is made up of many separate components, but usually the car is a depreciating asset rather than each component.
Example 2: A floating restaurant consists of many separate components (like the ship itself, stoves, fridges, furniture, crockery and cutlery), but usually these components are treated as separate depreciating assets.
(5) This Division applies to a renewal or extension of a * depreciating asset that is a right as if the renewal or extension were a continuation of the original right.
(6) This Division applies to a * mining, quarrying or prospecting right (the new right ) as if it were a continuation of another mining, quarrying or prospecting right you * held if:
(a) the other right ends; and
(b) the new right and the other right relate to the same area, or any difference in area is not significant.