If we have not made an effective life determination for an asset you use and there is no statutory effective life available, you must self-assess the effective life.
We only consider normal industry practice when estimating effective life. However, if you self-assess, you can consider your own circumstances of use of the asset.
We only make determinations of the effective life of new assets. If you purchase a second-hand asset where its condition justifies a shorter life than that determined by us, you can self-assess.
When self-assessing the effective life of a depreciating asset, either because we have not already made a determination for it or you feel our determination is not appropriate for your circumstances, we may ask you to explain your choice of effective life.
To help you self-assess the effective life of an asset, refer to how we make effective life determinations. For information about self-assessing the effective life of a depreciating asset, refer to section 40-105 of the ITAA 1997.
You can recalculate the effective life for most depreciating assets if the effective life used is no longer relevant because of changed circumstances relating to the use of the asset. An example could be unpredicted obsolescence or more or less rigorous use than anticipated.