Document ID: chunk:federal_register_of_legislation:C2004C01190:clause:2_216:p2
Version: federal_register_of_legislation:C2004C01190
Segment Type: clause
Provision Reference: sch 2 cl 216 (pt 2/8)
Character Range: 136637–139336

Division 40 or 328.

 (4) A *depreciating asset's *opening adjustable value for an income year is reduced if:
 (a) the entity that *holds the asset incurs expenditure that is included in the second element of the asset's cost for that income year; and
 (b) that income year is after the one in which the asset's*start time occurs; and
 (c) the entity is or becomes entitled to an *input tax credit for the *creditable acquisition or *creditable importation to which the expenditure relates for the income year in which the expenditure was incurred; and
 (d) the entity can deduct amounts for the asset under Division 40 or 328.
The reduction is the amount of the input tax credit.

 (5) If the reduction under subsection (2) or (4) is more than:
 (a) for a subsection (2) case—the *depreciating asset's *cost; or
 (b) for a subsection (4) case—the depreciating asset's *opening adjustable value;
the excess is included in the entity's assessable income unless the entity is an *exempt entity.

Exception: pooling

 (6) This section does not apply to:
 (a) a depreciating asset allocated to a low‑value pool or a pool under Division 328 for or in the *current year; or
 (b) *in‑house software if expenditure on the software is allocated to a software development pool for the current year; or
 (c) a project pool.

27‑85  Cost or opening adjustable value of depreciating assets reduced: decreasing adjustments

 (1) This section applies to an entity if:
 (a) the entity can deduct amounts for a *depreciating asset under Division 40 or 328; and
 (b) the entity has a *decreasing adjustment in an income year that relates directly or indirectly to the asset.

 (1A) However, this section does not apply to a *decreasing adjustment that arises under Division 129 or 132 of the *GST Act.

Note: See instead section 27‑87.

 (2) The asset's *cost is reduced by an amount equal to the *decreasing adjustment if the adjustment arises in the income year in which the asset's *start time occurs.

 (3) The asset's *opening adjustable value for an income year is reduced by an amount equal to the *decreasing adjustment if the adjustment arises in that year and that year is after the one in which the asset's*start time occurs.

 (4) If the reduction under subsection (2) or (3) is more than:
 (a) for a subsection (2) case—the *depreciating asset's *cost; or
 (b) for a subsection (3) case—the depreciating asset's *opening adjustable value;
the excess is included in the entity's assessable income unless the entity is an *exempt entity.

Exception: pooling

 (5) This section does not apply to:
 (a) a depreciating asset allocated to a low‑value pool or a pool under Division 328 for or in the *current