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INCOME TAX ASSESSMENT ACT 1997 - SECT 40.72 Diminishing value method for post - 9 May 2006 assets

INCOME TAX ASSESSMENT ACT 1997 - SECT 40.72

Diminishing value method for post - 9 May 2006 assets

  (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:

Start formula *Base value times start fraction Days held over 365 end fraction times start fraction 200% over Asset's *effective life end fraction end formula

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

  (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

  (e)   a * telecommunications site access right.

Limit on decline

  (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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