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INCOME TAX ASSESSMENT ACT 1997

CHAPTER 2 - LIABILITY RULES OF GENERAL APPLICATION  

PART 2-10 - CAPITAL ALLOWANCES: RULES ABOUT DEDUCTIBILITY OF CAPITAL EXPENDITURE  

Division 40 - Capital allowances    View history reference

Subdivision 40-B - Core provisions    View history reference

Operative provisions

SECTION 40-72  Diminishing value method for post-9 May 2006 assets  

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40-72(1)  

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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:
 *Base value×Days held×200% 
 365Asset's *effective life 

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

40-72(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


(d) a *datacasting transmitter licence; or


(e) a *telecommunications site access right.

Limit on decline

40-72(3)  

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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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