To work out the decline in value of depreciating assets you held before 1 July 2001, you generally use the same cost, effective life and method that you were using under the former law.
The undeducted cost of the asset at 30 June 2001 becomes its opening adjustable value at 1 July 2001.
The undeducted cost of the asset is worked out under the former depreciation rules. It is the asset's cost less the depreciation for the asset up to 30 June 2001, assuming that it was used wholly for producing assessable income.
For a depreciating asset that is an item of intellectual property or a spectrum licence and for certain depreciating assets used in mining, quarrying or minerals transport, the opening adjustable value at 1 July 2001 is the amount of unrecouped expenditure for the asset at 30 June 2001. These assets do not have an undeducted cost under the former rules.
Special transitional rules apply to plant for which you used accelerated rates of depreciation before 1 July 2001 or could have used accelerated rates had you used the plant, or had it installed ready for use, for producing assessable income before that day. These rules ensure that accelerated rates continue to apply under the UCA-see Accelerated depreciation.