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  • Replacements



    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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    It was the longstanding practice to treat the initial purchase of certain assets as not depreciable but to allow an immediate deduction for the cost of their replacement. The practice principally related to low-cost items that had very long or indeterminate lives, were difficult to keep track of, and were subject to frequent replacement through loss or breakage -for example, crockery, bedding, linen.

    However, the replacement basis for deductions is no longer available for assets you first use (or have installed ready for use) to produce income after 31 December 2000.

    An immediate deduction is available for depreciating assets costing $300 or less which are used predominantly in deriving non-business income (including rental income) if certain conditions are met -see the next section, Immediate deduction for depreciating assets costing $300 or less. Also, assets costing less than $1,000 may be written off through a low-value pool, see Low-value pooling.

    Last modified: 04 Dec 2005QC 27452