Document ID: chunk:federal_register_of_legislation:C2025C00029:section:10:p5
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 10 (pt 5/17)
Character Range: 874296–876920

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.
days held is the number of days you *held the asset in the income year from its *start time, ignoring any days in that year when you did not use the asset, or have it *installed ready for use, for any purpose.
Note 1: If you recalculate the effective life of a depreciating asset, you use that recalculated life in working out your deduction.
 You can choose to recalculate effective life because of changed circumstances: see section 40‑110. That section also requires you to recalculate effective life in some cases.
Note 2: The effective life of a vessel can change in some cases: see subsection 40‑103(2).

Exception: intangibles
 (2) You cannot use the *diminishing value method to work out the decline in value of:
 (a) *in‑house software; or
 (b) an item of *intellectual property (except copyright in a *film); or
 (c) a *spectrum licence; or
 (e) a *telecommunications site access right.

Limit on decline
 (3) The decline in value of a *depreciating asset under this section for an income year cannot be more than the amount that is the asset's *base value for that income year.

40‑72  Diminishing value method for post‑9 May 2006 assets
 (1) You work out the decline in value of a *depreciating asset for an income year using the diminishing value method in this way if you started to *hold the asset on or after 10 May 2006:
where:
days held has the same meaning as in subsection 40‑70(1).
Note: If you recalculate the effective life of a depreciating asset, you use that recalculated life in working out your deduction.
 You can choose to recalculate effective life because of changed circumstances: see section 40‑110. That section also requires you to recalculate effective life in some cases.

Exception: intangibles
 (2) You cannot use the *diminishing value method to work out the decline in value of:
 (a) *in‑house software; or
 (b) an item of *intellectual property (except copyright in a *film); or
 (c) a *spectrum licence; or
 (e) a *telecommunications site access right.

Limit on decline
 (3) The decline in value of a *depreciating asset under this section for an income year cannot be more than the amount that is the asset's *base value for that income year.

40‑75  Prime cost method
 (1) You work out the decline in value of a *depreciating asset for an income year using the prime cost method in this way:
where:
where:
days held has the same meaning as in subsection 40‑70(1).
Example: Greg acquires an asset for $3,500 and first uses it on the 26th