Valuation shortcut 1

Depreciating assets that have not been depreciated on an accelerated basis

The adjustable value at the joining time, which may be revised to ignore any balancing adjustment amount, can be taken as the market value for all depreciating assets where all of the following apply:

  • they have not been depreciated on an accelerated basis
  • their individual adjustable values amount to 1% or less of the joining entity's ACA
  • they are eligible for a deduction under Division 40 of the ITAA 1997, except for the following intangible assets     
    • mining, quarrying or prospecting rights
    • mining, quarrying or prospecting information
    • items of intellectual property
    • in-house software
    • IRUs (indefeasible rights to use an international telecommunications submarine cable)
    • spectrum licences
    • datacasting transmitter licences.

The market value ascertained by applying valuation shortcut 1 may be affected by a balancing adjustment event occurring under the income tax law. A taxpayer that has an assessable balancing adjustment amount because of a balancing adjustment relief has the option of revising the adjustable value. The revision ignores any balancing adjustment amount that reduces the amount available for decline in value of the depreciating asset.

    Last modified: 01 Jul 2015QC 21245