Document ID: chunk:federal_register_of_legislation:C2004A00844:clause:1_10:p5
Version: federal_register_of_legislation:C2004A00844
Segment Type: clause
Provision Reference: sch 1 cl 10 (pt 5/13)
Character Range: 32180–34754

The remaining effective life of a *depreciating asset is any period of its *effective life that is yet to elapse as at the start of the change year.

Note: Effective life is worked out in years and fractions of years.

 (5) You must also adjust the formula in subsection (1) for an intangible *depreciating asset that:
 (a) is mentioned in an item in the table in subsection 40‑95(7) (except item 5, 7 or 8); and
 (b) you acquire from a former *holder of the asset.
The adjustment applies for the income year in which you acquire the asset and later income years.

 (6) Instead of the asset's *effective life under the table in subsection 40‑95(7), you use the number of years remaining in that effective life as at the start of the income year in which you acquire the asset.

Limit on decline

 (7) The decline in value of a *depreciating asset under this section for an income year cannot be more than:
 (a) for the income year in which the asset's *start time occurs—its *cost; or
 (b) for a later year—the sum of its *opening adjustable value for that year and any amount included in the second element of its cost for that year.

40‑80  When you can deduct the asset's cost

Exploration or prospecting

 (1) The decline in value of a *depreciating asset you *hold is the asset's *cost if:
 (a) you first use the asset for *exploration or prospecting for *minerals, or quarry materials, obtainable by *mining operations; and
 (b) you do not use it for:
 (i) development drilling for *petroleum; or
 (ii) operations in the course of working a mining property, quarrying property or petroleum field; and
 (c) you satisfy one or more of these subparagraphs at the asset's *start time:
 (i) you carry on *mining operations;
 (ii) it would be reasonable to conclude you proposed to carry on such operations;
 (iii) you carry on a *business of, or a business that included, exploration or prospecting for minerals or quarry materials obtainable by such operations, and expenditure on the asset was necessarily incurred in carrying on that business.

Depreciating assets used for certain purposes

 (2) The decline in value of a *depreciating asset you start to *hold in an income year is the asset's *cost if:
 (a) that cost does not exceed $300; and
 (b) you use the asset predominantly for the *purpose of producing assessable income that is not income from carrying on a *business; and
 (c) the asset is not one that is part of a set of assets that you started to hold in that income year where the total cost of the set of assets exceeds $300; and
 (d) the total cost