Concessions for small business entities

Adjustable value

You must work out the adjustable value of each depreciating asset you start to use, or have installed ready to use, for a taxable purpose. Broadly, the adjustable value of an asset is its cost less its decline in value since you first used it (or installed it ready to use) for any purpose, whether business or private. The asset's cost does not include any amount that you can claim as a GST credit.

For assets you held before starting to use these rules and that you have been claiming deductions for under the general capital allowance rules, use the asset's adjustable value at the end of the previous year.

Allocate the taxable purpose proportion of the adjustable value of each asset costing $1,000 or more to the appropriate pool, then depreciate each pool as a single asset.

If you are eligible for the small business tax break deduction of 50% of the cost of the asset in the 2008-09 to 2010-11 income years, do not reduce the cost by the amount of the tax break deduction you are eligible to claim.

Sections within Simplified depreciation rules

• Low-cost assets
• Small business pools
• Taxable purpose
• Adjustable value
• Applying the simplified depreciation rules
• Record keeping
• Assets you held at the start of the year
• Assets you first use during an income year
• Cost addition amounts
• Asset disposals
• Working out the closing pool balance
• Cars
• If you choose to stop using these rules
• If you can no longer use these rules
• Contractors and consultants
• Exclusions
• Options
• Rollover relief
• Other capital expenditure