Instructions to complete this item if you are a small business entity using the simplified depreciation rules.
Small business concessions: simpler depreciation rules
For assets you start to hold from 7:30 pm (AEDT) on 6 October 2020 to 30 June 2023, and first use (or have installed ready for use) for a taxable purpose in the 2022-23 income year, the instant asset write-off threshold does not apply to businesses using the simplified depreciation rules. You must immediately deduct the taxable purpose proportion of the asset's cost under temporary full expensing – you do not add these assets to your small business pool.
You must also claim a deduction for the cost of improvements made from 7:30 pm (AEDT) on 6 October 2020 to 30 June 2023 to an asset that you have fully depreciated under the simplified depreciation rules (including instant asset write-off) in an earlier income year, provided you have not previously claimed improvement costs to the asset.
If you have previously fully depreciated an improvement cost for the asset, any additional improvement costs in the 2022–23 income year get allocated to the pool. You must also deduct any balance of the general small business pool at the end of the 2023 income year.
You cannot opt out of temporary full expensing for assets that the simplified depreciation rules apply to unless you opt out of the simplified depreciation rules.
To complete this item, use the amounts the company calculated for small business entity depreciation deductions at item 6 – label X Depreciation expenses. For more information, see Small business entities.
A – Deduction for certain assets (costing less than the relevant instant asset write-off threshold)
Small businesses using the simplified depreciation rules cannot apply the instant asset write-off threshold for assets you start to hold, and first use (or have installed ready for use) for a taxable purpose from 7:30 pm (AEDT) on 6 October 2020 to 30June 2023. You must immediately deduct the taxable purpose proportion of the asset's cost under temporary full expensing.
A small business entity using the simplified depreciation rules must write zero (write 0) at item 10 – label A because, in 2022–23, you do not hold an asset meeting the criteria to claim instant asset write-off.
You must also complete item 9 – labels S Temporary full expenses deductions and T Number of assets you are claiming for to show the amount, and number of depreciating assets, you are claiming a deduction for under temporary full expensing.
B – Deduction for general small business pool
Write at item 10 – label B the total amount the company claimed at item 6 relating to the general small business pool.
The total of 10A (Deduction for certain assets) and 10B (Deduction for general small business pool) combined cannot be more than 6X (Depreciation Expenses).
Continue to: 11. Consolidation deductions