Commonwealth Consolidated Acts

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Diminishing value method

             (1)  You work out the decline in value of a * depreciating asset for an income year using the diminishing value method in this way:


"base value" is:

                     (a)  for the income year in which the asset's * start time occurs--its * cost; or

                     (b)  for a later year--the sum of its * opening adjustable value for that year and any amount included in the second element of its cost for that year.

"days held" is the number of days you * held the asset in the income year from its * start time, ignoring any days in that year when you did not use the asset, or have it * installed ready for use, for any purpose.

Note 1:       If you recalculate the effective life of a depreciating asset, you use that recalculated life in working out your deduction.

                   You can choose to recalculate effective life because of changed circumstances: see section 40-110. That section also requires you to recalculate effective life in some cases.

Note 2:       The effective life of a vessel can change in some cases: see subsection 40-103(2).

Exception: intangibles

             (2)  You cannot use the * diminishing value method to work out the decline in value of:

                     (a)  * in-house software; or

                     (b)  an item of * intellectual property (except copyright in a * film); or

                     (c)  a * spectrum licence; or

                     (d)  a * datacasting transmitter licence; or

                     (e)  a * telecommunications site access right.

Limit on decline

             (3)  The decline in value of a * depreciating asset under this section for an income year cannot be more than the amount that is the asset's * base value for that income year.

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