• Record keeping for low-value pools

    Attention

    Warning:

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

    End of attention

    For depreciating assets in a low-value pool, you need to keep the following details - some details relate to the assets and some to the pool:

    • the start time of assets in the pool and the date you started holding them
    • the closing pool balance at the end of the previous income year
    • any second elements of cost incurred for the income year for assets in the pool at the end of the previous income year
    • the opening adjustable value of any low-value assets you have allocated to the pool for the income year
    • the first element of cost of any low-cost assets allocated to the pool for the income year
    • the second element of cost of low-cost assets and low-value assets allocated to the pool for the income year
    • the taxable use percentage of each amount added to the pool for the income year
    • the termination value and taxable use percentage for any assets in the pool in respect of which a balancing adjustment event occurred during the income year and the date of the balancing adjustment event
    • the closing pool balance
    • the decline in value
    • any amount included in assessable income because the taxable use percentage of the termination value exceeds the closing pool balance, and
    • any recoupment of cost you have included in assessable income.

    Because a capital gain or capital loss may arise when a balancing adjustment event occurs

    • in relation to a depreciating asset you expect to use for other than a taxable purpose, or
    • in relation to a depreciating asset you have allocated to a low-value pool and expect to use for other than a taxable purpose,

    you must keep the following information:

    • the first and second elements of cost
    • termination value, and
    • the taxable use percentage.

    Generally, records relating to a depreciating asset allocated to a low-value pool must be retained for a period of five years starting from the end of the income year in which the asset is allocated to the pool. However, there are two exceptions.

    If an amount is included in the second element of an asset's cost after the asset is allocated to a low-value pool, the records of the cost must be retained for a period of five years from the time the expenditure is incurred.

    Records of acquisitions relating to delayed claims for GST input tax credits must be retained for at least five years after the lodgment of the GST return making the delayed claim. Therefore, if a claim for input tax credits relates to a depreciating asset in a low-value pool, the record of acquisition may need to be retained for a period of five years which commences later than the end of the income year in which the asset is allocated to the pool.

    Last modified: 18 Jul 2006QC 27742