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  • Guidelines for using the depreciating assets worksheet

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    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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    The depreciating assets worksheetThis link will download a file (worksheet 1) can be downloaded here.

    Primary production and Non-primary production - Use a separate worksheet for each category.

    Cost - The cost of a depreciating asset includes first and second elements of cost. The cost of an asset can be adjusted in certain circumstances, such as if the first element of a car's cost exceeds the car limit. If the cost of the asset has been adjusted, include the adjusted cost in this column, see The cost of a depreciating asset.

    Opening adjustable value and Adjustable value at end of year - The adjustable value of a depreciating asset at any time is its cost (first and second elements) reduced by any decline in value up to that time. The opening adjustable value of an asset for an income year is the same as its adjustable value at the end of the previous income year.

    Balancing adjustment events - A balancing adjustment event occurs for a depreciating asset if you stop holding it (for example, if you sell it) or you stop using it, see What happens if you no longer hold or use a depreciating asset?

    Termination value - Generally, the termination value is what you receive for the asset under the balancing adjustment event, such as the proceeds from selling the asset, see Termination value.

    Balancing adjustment amounts - If the asset's termination value is greater than its adjustable value, the excess is an assessable balancing adjustment amount. If the termination value is less than the adjustable value, the difference is a deductible balancing adjustment amount. If the asset is used for non-taxable purposes, the balancing adjustment amount is reduced and a capital gain or capital loss may arise, see Depreciating asset used for non-taxable purpose.

    Balancing adjustment relief - This is a reference to the offsetting of otherwise assessable balancing adjustment amounts, such as for involuntary disposals, see Involuntary disposal of a depreciating asset.

    Decline in value - There are 2 methods of working out the decline in value of a depreciating asset-prime cost and diminishing value, see Methods of working out decline in value.

    Effective life or percentage rate - Both the prime cost and diminishing value methods are based on a depreciating asset's effective life, see Effective life. However, if you used accelerated rates of depreciation for an item of plant before 1 July 2001 or could have had you used the plant for producing assessable income, you continue to use accelerated rates to work out the decline in value rather than the effective life, see Accelerated depreciation. A list of accelerated rates is provided-see Accelerated rates of depreciation.

    Percentage of non-taxable use - This is the percentage of your non-taxable use (for example, private use) of the asset during the income year.

    Deduction for decline in value - Your deduction for the decline in value of the asset is the decline in value reduced to the extent you used the asset for a non-taxable purpose. Your deduction may also be reduced if the asset is a leisure facility or a boat, see Decline in value of depreciating asset used for non-taxable purpose.

    The letters G, H, I, J and K on the worksheet correspond to labels on the Capital allowances schedule 2002. The worksheet will assist you to complete the schedule-see Completing the Capital allowances schedule 2002.

    Extracts from Taxation Ruling IT 2685 and Taxation Ruling TR 2000/18 – effective lives

    Item

    Effective life in years given in IT 2685

    Effective life in years given in TR 2000/18

    Air conditioners:

    • Ducted

     

    15

     

    13 1/3

    • Room units

    10

    10

    Alarms

    20

    20

    Calculators, electronic

    10

    10

    Carpets, business premises

    5

    5

    Cash registers

    7

    6 2/3

    Chainsaw

    3

    2

    Computers

    5

    4

    Curtains and drapes

    7

    6 2/3

    Electric hand tools

    5

    5

    Electric vacuum cleaners

    10

    10

    Furniture

    15

    13 1/3

    Hot water service

    20

    20

    Libraries

    10

    10

    Lights, fluorescent

    20

    20

    Loose hand tools

    Full replacement cost

    5

    Motor vehicles

    • Buses:
      • Carry 9 or more

     

     

    7

     

     

    6 2/3

    • Carry fewer than 9

    7

    6 2/3

    • cars
      • taxis

     

    4

     

    4

    • other

    7

    6 2/3

    • trucks
      • carry 1 tonne or more

     

    7

     

    6 2/3

    • carry less than 1 tonne

    7

    6 2/3

    Photocopiers

    10

    5

    Television sets

    10

    10

    Washing machines

    7

    6 2/3

    Houses and flats let furnished

    • Blind, venetian

     

    20

     

    20

    • Carpets

    10

    10

    • Curtains and drapes

    7

    6 2/3

    • Electric bed

    15

    13 1/3

    • Electric clock

    15

    13 1/3

    • Electric heater

    10

    10

    • Furniture and fittings

    15

    13 1/3

    • Garbage unit, compacting

    7

    6 2/3

    • Hot water service

    20

    20

    • Lawn mowers
      • Motor

     

    7

     

    6 2/3

    • Self-propelled

    5

    5

    • Linoleum and similar floor coverings

    10

    10

    • Microwave ovens

    7

    6 2/3

    • Radios

    10

    10

    • Refrigerators

    15

    13 1/3

    • Stoves

    20

    20

    • Television sets

    10

    10

    • Vacuum cleaners

    10

    10

    • Washing machines

    7

    6 2/3

    Note: To find out which effective life you should use for a particular item-see Effective life.

    Accelerated rates of depreciation

    You use the rate that corresponds to the effective life of the item of plant. The following tables show the appropriate rates.

    For most general items of plant the rates are as follows.

    Effective life in years

    Prime cost rate (%)

    Diminishing value rate (%)

    Less than 3

    100

    -

    3 to less than 5

    40

    60

    5 to less than 6 2/3

    27

    40

    6 2/3 to less than 10

    20

    30

    10 to less than 13

    17

    25

    13 to less than 30

    13

    20

    30 or more

    7

    10

    For most cars and motor cycles the following rates apply.

    Effective life in years

    Prime cost rate (%)

    Diminishing value rate (%)

    Less than 3

    100

    -

    3 to less than 5

    33

    50

    5 to less than 6 2/3

    20

    30

    6 2/3 to less than 10

    15

    22.5

    10 to less than 13

    10

    15

    13 to less than 20

    8

    11.25

    20 to less than 40

    5

    7.5

    40 or more

    3

    3.75

    For employees' amenities, special minimum rates of 33 per cent prime cost or 50 per cent diminishing value apply. Employees' amenities means property used mainly to provide clothing cupboards, first aid, rest-room or recreational facilities and meals or facilities for meals for certain employees and their children.

    Last modified: 11 Dec 2019QC 27399