Document ID: chunk:federal_register_of_legislation:C2025C00029:section:10:p13
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 10 (pt 13/17)
Character Range: 893115–895778

for that year up to that time, less its decline in value for that year up to that time.
Note: The adjustable value of a depreciating asset may be modified by section 250‑285.
 (2) The opening adjustable value of a *depreciating asset for an income year is its *adjustable value to you at the end of the previous income year.
Note: The opening adjustable value of a depreciating asset may be modified by one of these provisions:
(a) Subdivision 27‑B;
(b) subsection 40‑90(3);
(c) subsection 40‑285(4);
(d) paragraph 40‑365(5)(b);
(e) section 775‑70;
(f) section 775‑75;
(g) section 355‑605 of the Income Tax (Transitional Provisions) Act 1997.

40‑90  Debt forgiveness
 (1) This section applies if an amount (the debt forgiveness amount) is applied in reduction of expenditure for a *depreciating asset in an income year under section 245‑155 or 245‑157.
 (2) The asset's *cost is reduced for that income year by the debt forgiveness amount.
 (3) The asset's *opening adjustable value for that income year is reduced by the debt forgiveness amount if that income year is later than the one in which its *start time occurs.

40‑95  Choice of determining effective life
 (1) You must choose either:
 (a) to use an *effective life determined by the Commissioner for a *depreciating asset under section 40‑100; or
 (b) to work out the effective life of the asset yourself under section 40‑105.
Note: If you choose to use an effective life determined by the Commissioner for a depreciating asset, a capped life may apply to the asset under section 40‑102.
 (2) Your choice of an *effective life determined by the Commissioner for a *depreciating asset is limited to one in force as at:
 (a) the time when you entered into a contract to acquire the asset, you otherwise acquired it or you started to construct it if its *start time occurs within 5 years of that time; or
 (b) for *plant that you entered into a contract to acquire, you otherwise acquired or you started to construct before 11.45 am, by legal time in the Australian Capital Territory, on 21 September 1999—the time when you entered into the contract to acquire it, otherwise acquired it or started to construct it; or
 (c) otherwise—its *start time.
 (3) You must make the choice for the income year in which the asset's *start time occurs.
Note: For rules about choices: see section 40‑130.

Exception: asset acquired from associate
 (4) For a *depreciating asset that you start to *hold where the former holder is an *associate of yours and the associate has deducted or can deduct an amount for the asset under this Division, you must use:
 (a) if the associate was using the *diminishing value method