ACCT2331 Chapter Notes - Chapter 17: Capital Allowance, Capital Expenditure, Small Business
Document Summary
17. 2 capital allowance regime (div 40 itaa97) [p446: division 40 provides deductions for the "decline in value" of "depreciating assets" (s40-25(1), deduction available is decreased by decline in asset value attributable to purpose. "taxable purpose" means for the purpose of producing assessable income, exploration or prospecting, mining site rehabilitation or environmental protection activities. (s 40-25(7)) Depreciating asset (s40-30) [p446: depreciating asset is an asset that has a limited "effective life" and can reasonably be expected to decline in value over the time it is used, excludes. Trading stock (dealt in div 70 instead) Legal owner entity is able to access economic benefit while stopping others to do so": when legal owner" economic owner", the holder is the "economic owner" of the asset. Decline in value [p447: asset begins to decline in value from its start time" the time it is used or installed ready for any use: s 40-60, can choose between 2 methods (s 40-65)
