(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).
(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.