P17 Intangible depreciating assets first deducted
Answer the questions below to complete this label.
Do you use the simplified depreciation rules?
- Yes – Small business entities using the simplified depreciation rules don't complete this question. Go to P21 Trading stock election.
- No – Read on.
Did you start to deduct the decline in value of any intangible depreciating assets?
- No – Go to P18 Other depreciating assets first deducted.
- Yes – Read on.
You need to know
The following intangible assets are regarded as depreciating assets (as long as they are not trading stock):
- certain items of intellectual property, such as patents, registered designs, copyrights and certain types of licences
- computer software (or a right to use computer software) that you acquire, develop or have someone else develop for your use for the purposes for which it is designed (in-house software)
- mining, quarrying or prospecting rights and information
- certain indefeasible rights to use a telecommunications cable system
- certain telecommunications site access rights
- spectrum licences.
A depreciating asset that you hold starts to decline in value from the time you use it or install it ready for use for any purpose, including a private purpose. However, you can only claim a deduction for the decline in value to the extent that you use the asset for a taxable purpose, such as for producing assessable income.
At P17 Intangible depreciating assets first deducted you need to show the cost of all intangible depreciating assets for which you are claiming a business deduction for decline in value for the first time. If you have allocated any intangible depreciating assets with a cost of less than $1,000 to a low-value pool for the income year, you also need to include the cost of those assets at P17 Intangible depreciating assets first deducted. Don't reduce the cost for estimated non-taxable use.
Expenditure on in-house software that you allocated to a software development pool is not shown at P17 Intangible depreciating assets first deducted.
For more information, see Guide to depreciating assets 2024.
Completing this question
Step 1 Add up the costs of intangible depreciating assets first deducted from each business.
Step 2 Write the total at P17 – label I in your schedule. Don't show cents.
P18 Other depreciating assets first deducted
Answer the questions below to complete this label.
Do you use the simplified depreciation rules?
- Yes – Small business entities using the simplified depreciation rules don't complete this question. Go to P21 Trading stock election.
- No – Read on.
Did you start to deduct the decline in value of any other depreciating assets in 2023–24?
- No – Go to P19 Termination value of intangible depreciating assets.
- Yes – Read on.
You need to know
A depreciating asset that you hold starts to decline in value from the time you use it or install it ready for use for any purpose, including a private purpose. However, you can claim a deduction for the decline in value only to the extent you use the asset for a taxable purpose, such as for producing assessable income.
At P18 Other depreciating assets first deducted you need to include the cost of all depreciating assets (other than intangible depreciating assets) for which you are claiming a business deduction for the decline in value for the first time.
If you have allocated any depreciating assets with a cost of less than $1,000 to a low-value pool for 2023–24, you also need to include the cost of those assets at P18 Other depreciating assets first deducted. Don't reduce the cost for estimated non-taxable use.
To calculate the decline in value of these assets use the Depreciation and capital allowances tool.
For more information, see Guide to depreciating assets 2024.
Completing this question
Step 1 Add up the costs of other depreciating assets first deducted from each business.
Step 2 Write the total at P18 – label J in your schedule. Don't show cents.
P19 Termination value of intangible depreciating assets
Answer the questions below to complete this label.
Do you use the simplified depreciation rules?
- Yes – Small business entities using the simplified depreciation rules don't complete this question. Go to P21 Trading stock election.
- No – Read on.
Did you stop holding or using any intangible depreciating assets in 2023–24?
- No – Go to P20 Termination value of other depreciating assets.
- Yes – Read on.
You need to know
Don't show at this question any consideration you received during 2023–24 in relation to in-house software for which you have allocated expenditure to a software development pool.
Include the termination values for intangible depreciating assets (including intangible assets allocated to a low-value pool) that you stopped holding or using during 2023–24 (for example, assets you sold, or that were lost or destroyed).
Generally, the termination value is the amount you received or are deemed to have received for the asset that you stopped holding or using. It includes the market value of any non-cash benefits, such as goods and services, you received for the asset.
Where the amount you received or were deemed to have received for the asset was less than its market value, and you did not deal at arm's length with another party to the transaction, the termination value is the market value of the asset just before you stopped holding it.
Completing this question
Step 1 Add up the amounts you received or are deemed to have received for all intangible depreciating assets that you stopped holding or using in your business, other than:
- assets allocated in a prior year to the general small business pool or the formerly available long-life small business pool
- low-cost assets for which an immediate deduction has been allowed under the simplified depreciation rules
- in-house software for which you allocated expenditure to a software development pool.
If you have more than one business, add up the termination value of intangible depreciating assets amounts for each business.
Step 2 Write the total at P19 – label D in your schedule. Don't show cents.
For more information, see Guide to depreciating assets 2024.
P20 Termination value of other depreciating assets
Answer the questions below to complete this label.
Do you use the simplified depreciation rules?
- Yes – Small business entities using the simplified depreciation rules don't complete this question. Go to P21 Trading stock election.
- No – Read on.
Did you stop holding or using any other depreciating assets in 2023–24?
- No – Go to P21 Trading stock election.
- Yes – Read on.
You need to know
At P20 Termination value of other depreciating assets you include the termination values for other depreciating assets (including assets allocated to a low-value pool) that you stopped holding or using during 2023–24 – for example, assets you sold, disposed of under a private or domestic arrangement, or that were lost or destroyed.
Generally, the termination value is the amount you received or are deemed to have received for the asset that you stopped holding or using. It includes the market value of any non-cash benefits, such as goods and services, you received for the asset.
Where the amount you received or were deemed to have received for the asset was less than its market value, and you did not deal at arm's length with another party to the transaction, the termination value is the market value of the asset just before you stopped holding it.
Completing this question
Step 1 Add up the amounts you received or are deemed to have received for all depreciating assets that you stopped holding or using in your business other than:
- intangible depreciating assets
- assets allocated in a prior year to the general small business pool or the formerly available long-life small business pool
- assets for which an immediate deduction has been allowed under the simplified depreciation rules
- buildings or structures for which a deduction is available under the capital works provisions
- assets falling within the provisions relating to investments in Australian films.
If you have more than one business, add up the termination value of other depreciating assets for each business.
Step 2 Write the total at P20 – label K in your schedule. Don't show cents.
For more information, see Guide to depreciating assets 2024.
Continue to: Trading stock election – P21