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  • Basis for depreciation



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

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    Generally, the normal depreciation rules apply for working out the attributable income of a CFC. This means you can choose to depreciate assets by the diminishing value method or the prime cost method. In addition, the rates of depreciation that apply for working out taxable income will also apply in working out attributable income.

    Example 19
    Deduction for depreciation

    A CFC purchased a depreciable asset on 1 July 2003 and uses it solely for the production of notional assessable income. For the statutory accounting period ended 30 June 2004, depreciation would be worked out as follows using the diminishing value method.

    Cost at 1 July 2003


    Depreciation - 20% X 20,000


    Written down value at 30 June 2004


    Depreciation in 2003-04


    Last modified: 05 Dec 2006QC 17522