Document ID: chunk:federal_register_of_legislation:C2025C00029:section:10:p7
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 10 (pt 7/17)
Character Range: 879119–881755

life that is yet to elapse as at:
 (a) the start of the change year; or
 (b) in the case of a roll‑over under section 40‑340—the time when the *balancing adjustment event occurs for the transferor.
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 and quarrying operations; and
 (b) when you first use the asset, 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 and quarrying 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; and
 (d) in a case where the asset is a *mining, quarrying or prospecting right—you acquired the asset from an *Australian government agency or a *government entity; and
 (e) in a case where the asset is *mining, quarrying or prospecting information:
 (i) you acquired the asset from an Australian government agency or a government entity; or
 (ii) the asset is a geophysical or geological data package you acquired from an entity to which subsection (1AA) applies; or
 (iii) you created