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> Your business situation > Expenses & deductions > Depreciating assets > Guide to depreciating assets  
 

Guide to depreciating assets 2005-06

 
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Warning: This information may not apply to the current year. Check the content carefully to ensure it is applicable to your circumstances.

Requirement to recalculate effective life

In some circumstances, you must recalculate the effective life of a depreciating asset.

You must recalculate the effective life of a depreciating asset if its cost is increased by 10% or more in an income year after the one in which its start time occurs and you either:

  • worked out the effective life of the asset yourself, or
     
  • used the Commissioner's determination of effective life (or a capped life) and the prime cost method to work out the asset's decline in value.

Even though you may be required to recalculate the effective life of an asset, you may conclude that the effective life remains the same.

You may also be required to recalculate the effective life of a depreciating asset:

  • which you acquired from an associate who claimed or could have claimed deductions for the asset's decline in value - see Depreciating asset acquired from an associate, or
     
  • for which you became the holder, where the user of the asset does not change or is an associate of the former user - for example, under a sale and leaseback arrangement - see Sale and leaseback arrangements.

Sections within Effective life

Last Modified: Tuesday, 18 July 2006
 
Table of contents
Copies of this publication
About this guide
Abbreviations used in this publication
New treatment for blackhole expenditure
Deductions for the cost of depreciating assets
The uniform capital allowance system
What is a depreciating asset?
Who can claim deductions for the decline in value of a depreciating asset?
Working out decline in value
Immediate deduction (for certain non-business depreciating assets costing $300 or less)
Effective life
The cost of a depreciating asset
What happens if you no longer hold or use a depreciating asset?
Low-value pools
In-house software
Common-rate pools
Primary production depreciating assets
Plants with an effective life of three or more years
Capital expenditure deductible under the UCA
Landcare operations
Electricity connections and telephone lines
Environmental protection activities
Mining and quarrying and minerals transport
Project pools
Business related costs - section 40-880 deductions
STS taxpayers
Record keeping
Completing the capital allowances schedule 2006
Definitions
Guidelines for using the depreciating assets worksheet
Guidelines for using the low-value pool worksheet
More information
Our commitment to you
How self-assessment affects you
Give us your feedback
 
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