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Edited version of your written advice
Authorisation Number: 1012705056520
Ruling
Subject: Depreciation
The Commissioner issued a ruling on the depreciation of assets purchased by Company A from Company B under contract.
Question 1
Does the Commissioner agree that the assets purchased by Company A from Company B under a contract are assets to which Division 40 of the Income Tax Assessment Act 1997 (ITAA 1997) applies pursuant to section 40-10 and section 40-12 of the Income Tax (Transitional Provisions) Act 1997?
Answer
Yes.
Question 2
If the Commissioner agrees with Question 1, does the Commissioner agree that the depreciable cost of the assets for the purposes of Division 40 (section 40-175) of the ITAA 1997 is the purchase price stated in the contract?
Answer
Yes.
Question 3
Does the Commissioner agree that Company A can deduct the decline in value of each of the assets acquired from Company B in accordance with section 40-25 of the ITAA 1997?
Answer
Yes.