INCOME TAX (TRANSITIONAL PROVISIONS) 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  

SECTION 40-25   Software  

40-25(1)  
Despite its repeal by this Act, Division 46 of the former Act continues to apply to expenditure on software that you incurred and that was in a software pool under that Division at the end of 30 June 2001.

40-25(2)  
For a unit of software for which you were deducting amounts under Subdivision 46-B of the former Act or for which you could have deducted amounts under that Subdivision if you had used the software for the purpose of producing assessable income before 1 July 2001, Division 40 of the new Act applies to the unit on this basis:


(a) its cost is the amount of expenditure you incurred on the unit; and


(b) you must use the prime cost method; and


(c) its opening adjustable value at 1 July 2001 is its undeducted cost at the end of 30 June 2001; and


(d) you must use the same effective life you were using under Subdivision 46-B of the former Act or that you would have used if you had used the software for the purpose of producing assessable income before 1 July 2001.

Note:

There are special rules for entities that have substituted accounting periods: see section 40-65 .




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