Guide to depreciating assets 2005-06

Decline in value of leisure facilities and boats

Your deduction for the decline in value of a leisure facility or boat may be reduced even though you use it, or install it ready for use, for a taxable purpose. Your deduction is limited to the extent:

• the asset's use is a fringe benefit
   
• the leisure facility is used (or held for use) mainly in the ordinary course of your business of providing leisure facilities for payment, to produce your assessable income in the nature of rents or similar charges, or for your employees' use or the care of their children, or
   
• the boat is used (or held for use) mainly for hiring out or transporting the public or goods for payment in the ordinary course of your business, or for a purpose that is essential to the efficient conduct of your business.

Sections within Working out decline in value

• When does a depreciating asset start to decline in value?
• Methods of working out decline in value
• The diminishing value method
• The prime cost method
• Depreciating assets held before 1 July 2001
• Accelerated depreciation
• Decline in value of a depreciating asset used for other than a taxable purpose
• Decline in value of leisure facilities and boats
• Depreciating asset acquired from an associate
• Sale and leaseback arrangements