Diminishing value method for post‑9 May 2006 assets
40-72 Diminishing value method for post‑9 May 2006 assets
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:
where:
days held has the same meaning as in subsection 40‑70(1).
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
You cannot use the *diminishing value method to work out the decline in value of:
*in‑house software; or
an item of *intellectual property (except copyright in a *film); or
a *spectrum licence; or
a *telecommunications site access right.
Limit on decline
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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