When can you recalculate effective life?

For plant acquired from 21 September 1999 and for depreciating assets acquired from 1 July 2001, the calculation of decline in value is generally based on the effective life of the plant or asset rather than on the accelerated rates of depreciation that were previously available.

See also:

You can choose to recalculate the effective life of a depreciating asset if the nature of your use of that asset changes and those changed circumstances make your current estimate inaccurate. Your choice to recalculate applies where:

  • you acquired the depreciating asset, or its construction began, from 1 July 2001
  • you acquired the plant, or its construction began, between 21 September 1999 and 30 June 2001.

You can reassess effective life, regardless of whether you made the existing estimate yourself, or adopted the effective life specified by the Commissioner.

You can only make a new estimate of effective life after the end of the income year in which you first started to use the asset for any purpose (including a non-income producing purpose).

    Last modified: 22 Aug 2016QC 16295