Commonwealth Consolidated Acts Commonwealth Consolidated Acts(1) For the purposes of Division 40 of the Income Tax Assessment Act 1997 , the decline in value of a depreciating asset you hold for an income year (the current year ) is the amount worked out under this section if:
(a) either:
(i) you start to use the asset, or have it installed ready for use, for a taxable purpose in the current year; or
(ii) you started to use the asset, or have it installed ready for use, for a taxable purpose in an earlier income year; and
(b) you are covered by section 40 - 150 for the asset; and
(c) you are covered for the current year by any of the following:
(i) section 40 - 155 (about businesses with turnover under $5 billion);
(ii) section 40 - 157 (about corporate tax entities with income under $5 billion); and
(d) the eligible second element worked out under section 40 - 175 for the asset for the year is greater than nil; and
(e) no balancing adjustment event happens to the asset in the current year; and
(f) you have not made a choice under section 40 - 190 in relation to the current year.
Exclusions
(1A) However, this section does not apply if:
(a) section 40 - 157 covers you for the current year (but section 40 - 155 does not); and
(b) an exclusion applies to you and the asset for the current year under section 40 - 167 (about exclusions for corporate tax entities with income under $5 billion).
Amount of the decline in value
(2) The decline in value of the asset for the current year is:
(a) if the asset's decline in value for the year would, apart from section 40 - 145, be worked out under section 40 - 82 of the Income Tax Assessment Act 1997 --the amount worked out under subsection (3); or
(b) if the asset's decline in value for the year would, apart from section 40 - 145, be worked out under Subdivision 40 - BA of this Act--the amount worked out under subsection (4); or
(c) otherwise--the amount worked out under subsection (5).
Assets affected by section 40 - 82 of the Income Tax Assessment Act 1997 (about assets costing less than $150,000, medium sized businesses)
(3) If this subsection applies, the amount for the current year is the sum of:
(a) the amount that would be the asset's decline in value for the year under section 40 - 82 of the Income Tax Assessment Act 1997 , assuming the reference in subparagraph 40 - 82(3A)(b)(ii) of that Act to 31 December 2020 were instead a reference to the 2020 budget time; and
(b) the eligible second element worked out under section 40 - 175 of this Act for the asset for the year.
Assets affected by Subdivision 40 - BA (backing business investment)
(4) If this subsection applies, the amount for the current year is the sum of:
(a) the amount that would be worked out under paragraph 40 - 130(2)(a) or (4)(a) (whichever is applicable) for the year, assuming the references in paragraphs 40 - 130(2)(a) and (4)(a) to 30 June 2021 were instead references to the 2020 budget time; and
(b) the eligible second element worked out under section 40 - 175 for the asset for the year; and
(c) the amount that would be worked out under paragraph 40 - 130(2)(b) or (4)(b) (whichever is applicable) for the year, assuming the references in paragraphs 40 - 130(2)(b) and (4)(b) to "the amount worked out under paragraph (a)" were instead references to "the amounts worked out under paragraphs 40 - 170(4)(a) and (b)".
Other assets
(5) If this subsection applies, the amount for the current year is the sum of:
(a) the amount that would be the asset's decline in value for the year under Division 40 of the Income Tax Assessment Act 1997 , disregarding any amounts included in the eligible second element worked out under section 40 - 175 of this Act for the asset for the year; and
(b) the eligible second element worked out under section 40 - 175 for the asset for the year.