INCOME TAX ASSESSMENT ACT 1997

CHAPTER 2 - LIABILITY RULES OF GENERAL APPLICATION  

PART 2-5 - RULES ABOUT DEDUCTIBILITY OF PARTICULAR KINDS OF AMOUNTS  

Division 27 - Effect of input tax credits etc. on deductions  

Subdivision 27-B - Effect of input tax credits etc. on capital allowances  

SECTION 27-85   Cost or opening adjustable value of depreciating assets reduced: decreasing adjustments  

27-85(1)  
This section applies to an entity if:


(a) the entity can deduct amounts for a * depreciating asset under Division 40 or 328 ; and


(b) the entity has a * decreasing adjustment in an income year that relates directly or indirectly to the asset.

27-85(1A)  
However, this section does not apply to a * decreasing adjustment that arises under Division 129 or 132 of the * GST Act.

Note:

See instead section 27-87 .

27-85(2)  
The asset ' s * cost is reduced by an amount equal to the * decreasing adjustment if the adjustment arises in the income year in which the asset ' s * start time occurs.

27-85(3)  


The asset ' s * opening adjustable value for an income year and its * cost is reduced by an amount equal to the * decreasing adjustment if the adjustment arises in that year and that year is after the one in which the asset ' s * start time occurs.

27-85(4)  
If the reduction under subsection (2) or (3) is more than:


(a) for a subsection (2) case - the * depreciating asset ' s * cost; or


(b) for a subsection (3) case - the depreciating asset ' s * opening adjustable value;

the excess is included in the entity ' s assessable income unless the entity is an * exempt entity.

Exception: pooling

27-85(5)  
This section does not apply to:


(a) a depreciating asset allocated to a low-value pool or a pool under Division 328 for or in the * current year; or


(b) * in-house software if expenditure on the software is allocated to a software development pool for the current year; or


(c) a project pool.


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