Document ID: chunk:federal_register_of_legislation:C2004A00844:clause:1_10:p10
Version: federal_register_of_legislation:C2004A00844
Segment Type: clause
Provision Reference: sch 1 cl 10 (pt 10/13)
Character Range: 45901–48547

its *cost is increased in that year by at least 10%.

Note 1: You may conclude that the effective life is the same.

Note 2: For the elements of the cost of a depreciating asset, see Subdivision 40‑C.

Example 1: Paul purchases a photocopier and self‑assesses its effective life at 6 years. In a later year he incurs expenditure to increase the quality of the reproductions it makes. He recalculates its effective life, but concludes that it remains the same.

Example 2: Fiona also purchases a photocopier and self‑assesses its effective life at 6 years. In a later year she incurs expenditure to incorporate a more robust paper handling system. She recalculates its effective life, and concludes that it is increased to 7 years.

 (3) You must recalculate a *depreciating asset's *effective life for the income year in which you started to *hold it if:
 (a) you are using an effective life because of subsection 40‑95(4) or (5); and
 (b) the asset's *cost is increased after you started to hold it in that year by at least 10%.

 (4) A recalculation under this section must be done using section 40‑105 (about self‑assessing effective life).

Exception: intangibles

 (5) This section does not apply to an intangible *depreciating asset mentioned in the table in subsection 40‑95(7).

40‑115  Splitting a depreciating asset

 (1) If a *depreciating asset you *hold is split into 2 or more assets, this Division applies as if you had stopped holding the original asset and started holding the assets into which it is split.

Note 1: For the cost of the split assets, see section 40‑205.

Note 2: A balancing adjustment event does not occur just because you split a depreciating asset: see section 40‑295.

 (2) If you stop *holding part of a *depreciating asset, this Division applies as if, just before you stopped holding that part, you had split the original asset into the part you stopped holding and the rest of the original asset. (The rest of the original asset is then taken to be a different asset from the original asset.)

Example: Bronwyn sells Tim a part interest in a depreciating asset she owns. They become joint holders under section 40‑35. She is taken to have split the underlying asset into the interest she retains and the interest Tim buys. She now holds an interest (a new depreciating asset) in the underlying asset and is taken to have stopped holding the interest sold.

 (3) If you grant or assign an interest in an item of *intellectual property, subsection (2) applies to you as if you had stopped *holding part of the item.

40‑120  Replacement spectrum licences

 (1) If:
 (a) some (but not all) of a *spectrum