Income Tax Assessment Act 1997

CHAPTER 2 - LIABILITY RULES OF GENERAL APPLICATION  

PART 2-10 - CAPITAL ALLOWANCES: RULES ABOUT DEDUCTIBILITY OF CAPITAL EXPENDITURE  

Division 40 - Capital allowances  

Subdivision 40-B - Core provisions  

Operative provisions

SECTION 40-72   Diminishing value method for post-9 May 2006 assets  

40-72(1)    


You work out the decline in value of a *depreciating asset for an income year using the diminishing value method in this way if you started to *hold the asset on or after 10 May 2006:


  *Base value × Days held × 200%  
  365 Asset ' s *effective life  

where:

days held
has the same meaning as in subsection 40-70(1) .

Note:

If you recalculate the effective life of a depreciating asset, you use that recalculated life in working out your deduction.

You can choose to recalculate effective life because of changed circumstances: see section 40-110 . That section also requires you to recalculate effective life in some cases.



Exception: intangibles

40-72(2)    
You cannot use the *diminishing value method to work out the decline in value of:

(a)    *in-house software; or

(b)    an item of *intellectual property (except copyright in a *film); or

(c)    a *spectrum licence; or


(d) (Repealed by No 151 of 2020)

(e)    a *telecommunications site access right.



Limit on decline

40-72(3)    


The decline in value of a *depreciating asset under this section for an income year cannot be more than the amount that is the asset ' s *base value for that income year.


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