Depreciating asset acquired from an associate
This information may not apply to the current year. Check the content carefully to ensure it is applicable to your circumstances.
End of attention
If you acquired plant on or after 9 May 2001 or another depreciating asset on or after 1 July 2001 from an associate, such as a relative or partner, and the associate claimed or can claim deductions for the decline in value of the asset, you must use the same method of working out the decline in value as the associate used.
You must also use the same effective life as the associate used if they used the diminishing value method. If they used the prime cost method you must use any remaining period of the effective life used by them.
You must recalculate the effective life of the depreciating asset if the asset's cost increases by 10% or more in any income year, including the year in which you start to hold it - see How to recalculate effective life.
You can require the associate to tell you what method and effective life they used by serving a notice on them within 60 days after you acquire the asset. Penalties can be imposed if the associate intentionally refuses or fails to comply with the notice.
Last modified: 01 Oct 2006QC 27597