Expenses deductible over a number of income years

There are three types of expenses you may incur for your rental property that may be claimed over a number of income years:

• borrowing expenses
• amounts for decline in value of depreciating assets (allowed only in certain circumstances)
• capital works deductions.

Each of these categories is discussed in detail.

Borrowing expenses

These are expenses directly incurred in taking out a loan for the property. They include:

• loan establishment fees
• title search fees charged by your lender
• costs for preparing and filing mortgage documents
• mortgage broker fees
• stamp duty charged on the mortgage
• fees for a valuation required for loan approval
• lender's mortgage insurance billed to the borrower.

The following are not borrowing expenses:

• insurance policy premiums on a policy that provides for your loan on the property to be paid out in the event that you die or become disabled or unemployed
• interest expenses
• stamp duty charged on the transfer of the property
• stamp duty incurred to acquire a leasehold interest in property (such as an ACT 99-year Crown lease).

If your total borrowing expenses are more than $100, the deduction is spread over five years or the term of the loan, whichever is less. If the total deductible borrowing expenses are $100 or less, they are fully deductible in the income year they are incurred.

If you repay the loan early and in less than five years, you can claim a deduction for the balance of the borrowing expenses in the year the loan is repaid in full.

If you obtained the loan part way through the income year, the deduction for the first year will be apportioned according to the number of days in the year that you had the loan.

Deduction for decline in value of depreciating assets

When you purchase a rental property, you are generally treated for tax purposes as having bought a building, plus various separate items of 'plant'. Items of plant are depreciating assets, such as air conditioners, stoves and other items. The purchase price accordingly needs to be allocated between the 'building' and various depreciating assets. For more information about 'plant', see Definitions.

You can deduct an amount equal to the decline in value for an income year of a depreciating asset that you held at any time during the year. However, your deduction is reduced to the extent your use of the asset is for a purpose other than a taxable purpose. From 1 July 2017, your deduction is also reduced to the extent you installed or used the asset in your residential rental property to derive rental income and the asset was a second-hand depreciating asset (unless an exception applies). For more information, see Limit on deductions for decline in value of second-hand depreciating assets.

Some items found in a rental property are regarded as part of the setting for the rent-producing activity and are not treated as separate assets in their own right. If your depreciating asset is not plant, and it is fixed to, or otherwise part of, a building or structural improvement, your expenditure will generally be construction expenditure for capital works and only a capital works deduction may be available for those items.

For more information, see Capital works deductions.

Limit on deductions for decline in value of second-hand depreciating assets

From 1 July 2017, there are new rules for deductions for decline in value of certain second-hand depreciating assets in your residential rental property. If you use these assets to produce rental income from your residential rental property, you cannot claim a deduction for their decline in value unless you are using the property in carrying on a business (including a rental property business), or you are an excluded entity. For the meaning of 'residential rental property' and 'excluded entity', see Definitions.

Second-hand depreciating assets are depreciating assets previously installed ready for use or used:

• by another entity (except as trading stock)
• in your private residence, or
• for a non-taxable purpose, unless that use was occasional (for example, staying at the property for one evening while carrying out maintenance activities would be considered an occasional use).

This change generally applies to the depreciating assets that you:

• entered into a contract to acquire, or otherwise acquired, at or after 7.30 pm on 9 May 2017, or
• used or had installed ready for use for any private purpose in 2016–17 or earlier income years, for which you were not entitled to a deduction for a decline in value in 2016–17 (for example, depreciating assets in a property that was your home in 2016–17 that you turned into your residential rental property in 2017–18).

There are no changes to the rules about deductions for decline in value of new depreciating assets in your residential rental property. Similarly, there are no changes to the rules about deductions for decline in value of depreciating assets in your residential rental property that you installed or used for a taxable purpose other than the purpose of deriving rental income.

Assets in new residential rental properties

If you acquire a newly built residential property from a developer, or buy a residential property that has been substantially renovated, you can claim a deduction for a decline in value of a depreciating asset in the property (or its common area) if:

• no one was previously entitled to a deduction for the asset, and:
• either
  • no one resided in the property before you acquired it, or
  • the asset was installed for use or used at this property and you acquired the property within six months of it being built or substantially renovated.
   

Substantial renovations of a building are renovations in which all, or substantially all, of a building is removed or is replaced. The renovations may, but do not necessarily have to, involve the removal or replacement of foundations, external walls, interior supporting walls, floors, roof or staircases. For more information, see Goods and Services Tax Ruling: GSTR 2003/3 Goods and services tax: when is a sale of real property a sale of new residential premises?

How do you work out your deduction?

You work out your deduction for the decline in value of a depreciating asset using either the prime cost or diminishing value method. Both methods are based on the effective life of the asset. You can work out your deductions using the Depreciation and capital allowances tool. You can use this tool during the year to progressively enter amounts.

The diminishing value method assumes that the decline in value each year is a constant proportion of the remaining value and produces a progressively smaller decline over time.

For depreciating assets you started to hold on or after 10 May 2006, you generally use the following formula for working out decline in value using the diminishing value method:

* For the income year in which an asset is first used or installed ready for use for any purpose, the base value is the asset’s cost. For a later income year, the base value is the asset’s opening adjustable value plus any amounts included in the asset’s second element of cost for that year.

** Can be 366 in a leap year.

This formula does not apply in some cases, such as if you dispose of and reacquire an asset just so the decline in value of the asset can be worked out using this formula.

For depreciating assets you started to hold prior to 10 May 2006, the formula for working out decline in value using the diminishing value method is:

* For the income year in which an asset is first used or installed ready for use for any purpose, the base value is the asset’s cost. For a later income year, the base value is the asset’s opening adjustable value plus any amounts included in the asset’s second element of cost for that year.

** Can be 366 in a leap year.

An asset’s cost has two elements. The first element of cost is, generally, amounts you are taken to have paid to hold the asset, such as the purchase price. The second element of cost is, generally, the amount you are taken to have paid to bring the asset to its present condition, such as the cost of capital improvements to the asset. If more than one person holds a depreciating asset, each holder works out their deduction for the decline in value of the asset based on their interest in the asset and not on the cost of the asset itself.

The adjustable value of a depreciating asset is its cost (first and second elements) less its decline in value up to that time. Adjustable value is similar to the concept of undeducted cost used in the former depreciation provisions. The opening adjustable value of an asset for an income year is generally the same as its adjustable value at the end of the previous income year.

The prime cost method assumes that the value of a depreciating asset decreases uniformly over its effective life. The formula for working out decline in value using the prime cost method is:

** Can be 366 in a leap year.

The formula under the prime cost method may have to be adjusted if the cost, effective life or adjustable value of the asset is modified. For more information, see Guide to depreciating assets 2018.

Under the diminishing value method, the decline in value of an asset for a particular income year cannot amount to more than its base value for that income year.

Under the prime cost method, the general rule is that the decline in value of an asset for a particular income year cannot exceed its opening adjustable value for that year and any amount included in the second element of its cost for that year. For an income year in which the asset start time occurs, the decline in value of an asset cannot exceed its cost.

If you use a depreciating asset for other than a taxable purpose (for example, you use the same lawn mower at both your rental property and your private residence) you are allowed only a partial deduction for the asset’s decline in value, based on the percentage of the asset’s total use that was for a taxable purpose.

If the asset is a second-hand depreciating asset you use to derive rental income from your residential rental property, you may not be able to claim a deduction for its decline in value. See Limit on deductions for decline in value of second-hand depreciating assets.

Effective life

Generally, the effective life of a depreciating asset is how long it can be used to produce income:

• having regard to the wear and tear you reasonably expect from your expected circumstances of use
• assuming that it will be maintained in reasonably good order and condition
• having regard to the period within which it is likely to be scrapped, sold for no more than scrap value or abandoned.

Effective life can be expressed in whole years. It is not rounded to the nearest whole year.

For most depreciating assets you can choose to work out the effective life yourself or to use an effective life determined by the Commissioner of Taxation.

The sort of information you could use to make an estimate of effective life of an asset is listed in Guide to depreciating assets 2018.

In making his determination, the Commissioner assumes the depreciating asset is new, and has regard to general industry circumstances of use.

The Commissioner issues yearly Taxation Rulings on how to determine the effective life of depreciating assets.

• TR 2017/2W is applicable from 1 July 2017
• TR 2016/1W is applicable from 1 July 2016
• TR 2015/2W is applicable from 1 July 2015
• TR 2014/4W is applicable from 1 July 2014
• TR 2013/4W is applicable from 1 July 2013
• TR 2012/2W is applicable from 1 July 2012
• TR 2011/2W is applicable from 1 July 2011
• TR 2010/2W is applicable from 1 July 2010
• TR 2009/4W is applicable from 1 July 2009
• TR 2008/4W is applicable from 1 July 2008
• TR 2007/3W is applicable from 1 July 2007
• TR 2006/15W is applicable from 1 January 2007
• TR 2006/5W is applicable from 1 July 2006
• TR 2000/18W is applicable from 1 January 2001.

Because the Commissioner often reviews the determinations of effective life, the determined effective life may change from the beginning of, or during, an income year. You need to work out which Taxation Ruling, or which schedule accompanying the relevant Taxation Ruling to use for a particular asset’s determined effective life.

As a general rule, use the ruling or schedule that is in force at the time you:

• entered into a contract to acquire the depreciating asset
• otherwise acquired it, or
• started to construct it.

Immediate deduction for certain non-business depreciating assets costing $300 or less

The decline in value of certain depreciating assets costing $300 or less is their cost. This means you get an immediate deduction for the cost of the asset to the extent that you use it to produce assessable income, including rental income, during the income year in which the deduction is available.

The immediate deduction is available if all of the following tests are met in relation to the asset:

• it cost $300 or less
• you used it mainly for the purpose of producing assessable income that was not income from carrying on a business (for example, rental income where your rental activities did not amount to the carrying on of a business)
• it was not part of a set of assets costing more than $300 that you started to hold in the income year
• it was not one of a number of identical, or substantially identical, assets that you started to hold in the income year that together cost more than $300.

If you hold an asset jointly with others and the cost of your interest in the asset is $300 or less, you can claim the immediate deduction even though the total cost of the asset was more than $300; see Partners carrying on a rental property business.

The amount of the immediate deduction may need to be reduced if the changes which limit deductions for decline in value of certain second-hand depreciating assets in residential rental properties apply to the asset. See Limit on deductions for decline in value of second-hand depreciating assets.

For more information about immediate deductions for depreciating assets costing $300 or less, see Guide to depreciating assets 2018.

Low-value pooling

You can allocate low-cost assets and low-value assets relating to your rental activity to a low-value pool.

A low-cost asset is a depreciating asset that costs less than $1,000 as at the end of the income year in which you start to use it, or have it installed ready for use, for a taxable purpose.

A low-value asset is a depreciating asset that is not a low-cost asset but which on 1 July for the current year (1 July 2017) had been written off to less than $1,000 under the diminishing value method.

If you hold an asset jointly and the cost of your interest in the asset or the opening adjustable value of your interest is less than $1,000, you can allocate your interest in the asset to your low-value pool.

Once you choose to create a low-value pool and allocate a low-cost asset to it, you must pool all other low-cost assets you start to hold from that time on. However, this does not apply to low-value assets. You can decide whether to allocate low-value assets to the pool on an asset-by-asset basis.

Once you have allocated an asset to the pool, it remains in the pool.

Once an asset is allocated to a low-value pool it is not necessary to work out its adjustable value or decline in value separately. Only one annual calculation for the decline in value for all of the depreciating assets in the pool is required.

You work out the deduction for the decline in value of depreciating assets in a low-value pool using a diminishing value rate of 37.5%.

For the income year you allocate a low-cost asset to the pool, you work out its decline in value at a rate of 18.75%, or half the pool rate. Halving the rate recognises that assets may be allocated to the pool throughout the income year and eliminates the need to make separate calculations for each asset based on the date it was allocated to the pool.

When you first allocate a depreciating asset to a low-value pool, you must make a reasonable estimate of the percentage that you will use the asset for a taxable purpose over its effective life (for a low-cost asset) or its remaining effective life (for a low-value asset). This percentage is known as the asset’s taxable use percentage.

From 1 July 2017, only include the taxable purpose of using the asset to produce rental income from residential rental property if you would be entitled to claim a deduction for the decline in value of that asset. See Limit on deductions for decline in value of second-hand depreciating assets. For the meaning of 'excluded entity' and 'residential rental property', see Definitions.

It is this taxable use percentage of the cost or opening adjustable value that is written off through the low-value pool.

For more information about low-value pooling, and on how to treat assets used only partly to produce assessable income, including rental income, and how to treat the disposal of assets from a low-value pool see Guide to depreciating assets 2018. You can work out your deductions for assets you allocate to a low-value pool using the depreciation and capital allowances tool. You can use this tool for each income year to calculate decline in value deduction amounts.

If you are an individual who owns or jointly owns a rental property, you claim your low-value pool deduction for rental assets as a ’Low-value pool deduction’ on your tax return, and you do not take this deduction into account in the amount you show at 'Rent’ on your tax return.

What happens if you no longer hold or use a depreciating asset?

If you cease to hold or to use a depreciating asset, a balancing adjustment event will occur. If there is a balancing adjustment event, you need to work out a balancing adjustment amount to include in your assessable income or to claim as a deduction.

A balancing adjustment event occurs for a depreciating asset if:

• you stop holding it, for example, if the asset is sold, lost or destroyed
• you stop using it and expect never to use it again
• you stop having it installed ready for use and you expect never to install it ready for use again
• you have not used it and decide never to use it, or
• a change occurs in the holding or interests in an asset which was or is to become a partnership asset.

You work out the balancing adjustment amount by comparing the asset’s termination value (such as the proceeds from the sale of the asset) and its adjustable value at the time of the balancing adjustment event. If the termination value is greater than the adjustable value, you include the excess in your assessable income. If you are an individual who owns or has co-ownership of a rental property, you show the assessable amount as Other income on your tax return and do not take it into account in the amount you show at Rent.

If the termination value is less than the adjustable value, you can deduct the difference.

For more information about balancing adjustments, see the Guide to depreciating assets 2018.

If a balancing adjustment event happens to a depreciating asset that you used at some time other than for income-producing purposes (for example, privately) then a capital gain or capital loss might arise to the extent that you so used the asset.

From 1 July 2017, if a balancing adjustment event happens to a depreciating asset to which the new rules about deductions for decline in value of second-hand depreciating assets in residential rental properties apply, then a capital gain or capital loss might arise.

You can work out balancing adjustments using the Depreciation and Capital Allowances Tool (DCAT).

For more information about capital gains tax and depreciating assets, see Guide to depreciating assets 2018.

Purchase and valuation of depreciating assets

Where you pay an amount for a depreciating asset and something else, only that part that is reasonably attributable to the depreciating asset is treated as being paid for.

Where you purchase a rental property from an unrelated party, one objective means of establishing your cost of depreciating assets acquired with the property is to have their value, as agreed between the contracting parties, specified in the sale agreement. The values need to be reasonable. If the sale agreement for your property does not specify separate values for the depreciating assets, you will need to work out a reasonable cost for the assets to determine your claim for depreciation.

You can do this yourself or you may wish to use a qualified valuer. Any valuation methodology used to work out the cost of the depreciating assets must be able to demonstrate a reasonable basis for that value. For more information about valuing depreciating assets, see Market valuation for tax purposes - Part B: Real property and plant and equipment

Apportionment of values between various assets affects the cost base of the property which is subject to capital gains tax. Amounts allocated to the cost of depreciating assets on the purchase of the rental property are subtracted from the purchase price, in order to arrive at the CGT cost base of the rental property.

Working out your deductions for decline in value of depreciating assets

Following are two examples of how to work out decline in value deductions for new assets in newly built residential rental properties.

The Guide to depreciating assets 2018 has two worksheets (Worksheet 1: Depreciating assets and Worksheet 2: Low-value pool) that you can use to work out your deductions for decline in value of depreciating assets. You can also work out your deductions using the depreciation and capital allowances tool (DCAT).

Capital works deductions

You can deduct certain kinds of construction expenditure. In the case of residential rental properties, the deductions would generally be spread over a period of 25 or 40 years. These are referred to as capital works deductions. Your total capital works deductions cannot exceed the construction expenditure. No deduction is available until the construction is complete.

Deductions based on construction expenditure apply to capital works such as:

• a building or an extension, for example, adding a room, garage, patio or pergola
• alterations, such as removing or adding an internal wall
• structural improvements to the property, for example, adding a gazebo, carport, sealed driveway, retaining wall or fence.

You can only claim deductions for the period during the year that the property is rented or is available for rent.

Where the rental property is destroyed, for example by fire, and results in a total loss of the asset, you can deduct an amount in the income year in which the capital works are destroyed for all of your construction expenditure that has not yet been deducted. However, you must reduce this deduction by any insurance and salvage receipts.

If however, using the same example above, during an income year the building is affected by fire and the building cannot be rented or made available for rent but it is expected to be made available for rent again, then the owners cannot claim a deduction for capital works for the number of days that the building is not available for rent.

If you claimed capital works deductions based on construction expenditure, you cannot take that expenditure into account in working out any other types of deductions you claim, such as deductions for decline in value of depreciating assets.

Amount of deduction

The amount of the deduction you can claim depends on the type of construction and the date construction started.

Table 1 below shows you the types of rental property construction that qualify. If the type of construction you own (or own jointly) does not appear next to the relevant ‘date construction started’ in the table, you cannot claim a deduction. If the type of construction qualifies, Table 2 shows the rate of deduction available.

Table 1

Date construction started	Type of construction for which deduction can be claimed
Before 22 August 1979	None
22 August 1979 to 19 July 1982	Certain buildings (see note 1) intended to be used on completion to provide short-term accommodation to travellers (see note 2)
20 July 1982 to 17 July 1985	Certain buildings (see note 1) intended to be used on completion to provide short-term accommodation to travellers (see note 2)
	Building intended to be used on completion for non-residential purposes (for example, a shop or office)
18 July 1985 to 26 February 1992	Any building intended to be used on completion for residential purposes or to produce income
27 February 1992 to 18 August 1992	Certain buildings (see note 1) intended to be used on completion to provide short-term accommodation to travellers (see note 2)
	Any other building intended to be used on completion for residential purposes or to produce income
	Structural improvements intended to be used on completion for residential purposes or to produce income
19 August 1992 to 30 June 1997	Certain buildings (see note 1) intended to be used on completion to provide short-term accommodation to travellers (see note 2)
	Any other building intended to be used on completion for residential purposes or to produce income
	Structural improvements intended to be used on completion for residential purposes or to produce income
	Environment protection earthworks (see note 2) intended to be used on completion for residential purposes or to produce income
After 30 June 1997	Any capital works used to produce income (even if, on completion, it was not intended that they be used for that purpose)

Note 1: ‘Certain buildings’ are apartment buildings in which you own or lease at least 10 apartments, units or flats; or a hotel, motel or guest house that has at least 10 bedrooms.

Note 2: For more information, phone 13 28 66.

Table 2

Date construction started	Rate of deduction per income year
Before 22 August 1979	nil
22 August 1979 to 21 August 1984	2.5%
22 August 1984 to 15 September 1987	4%
After 15 September 1987	2.5%

Where construction of a building to provide short-term accommodation for travellers commenced after 26 February 1992, the rate of deduction was increased to 4%.

For apartment buildings, the 4% rate applies to apartments, units or flats only if you own or lease 10 or more of them in the building.

The deduction can be claimed for 25 years from the date construction was completed in the case of a 4% deduction, and for 40 years from the date construction was completed in the case of a 2.5% deduction. If the construction was completed part of the way through the income year, you can claim a pro-rata deduction for that part.

Construction expenditure that can be claimed

Construction expenditure is the actual cost of constructing the building or extension. A deduction is allowed for expenditure incurred in the construction of a building if you contract a builder to construct the building on your land. This includes the component of your payments that represents the profit made by individual tradespeople, builders and architects. If you are an owner/builder, the value of your contributions to the works, for example, your labour and expertise, and any notional profit element do not form part of the construction expenditure.

If you purchase your property from a speculative builder, you cannot claim the component of your payment that represents the builder’s profit margin as a capital works deduction.

Some costs that you may include in construction expenditure are:

• preliminary expenses such as architects’ fees, engineering fees and the cost of foundation excavations
• payments to carpenters, bricklayers and other tradespeople for construction of the building
• payments for the construction of retaining walls, fences and in-ground swimming pools.

Construction expenditure that cannot be claimed

Some costs that are not included in construction expenditure are:

• the cost of the land on which the rental property is built
• expenditure on clearing the land prior to construction
• earthworks that are permanent, can be economically maintained and are not integral to the installation or construction of a structure
• expenditure on landscaping.

Changes in building ownership

Where ownership of the building changes, the right to claim any undeducted construction expenditure for capital works passes to the new owner. A new owner should confirm that the building was constructed during one of the appropriate periods outlined in table 1. To be able to claim the deduction, the new owner must continue to use the building to produce income.

If the previous owner was allowed capital works deductions, and the capital works started after 26 February 1992, they are required to give you as the new owner information that will enable you to calculate those deductions going forward. Where the property was not previously used to produce assessable income, the owner disposing of the property does not need to provide the purchaser with that information. In this situation the purchaser may obtain an estimate from a professional. For more information, see Estimating construction costs.

For more information about providing a notice or certificate, see Subsection 262A(4AJA) of Income Tax Assessment Act 1936.

Estimating construction costs

Where a new owner is unable to determine precisely the construction expenditure associated with a building, an estimate provided by an appropriately qualified person may be used. Appropriately qualified people include:

• a clerk of works, such as a project organiser for major building projects
• a supervising architect who approves payments at stages of projects
• a builder who is experienced in estimating construction costs of similar building projects
• a quantity surveyor.

Unless they are otherwise qualified, valuers, real estate agents, accountants and solicitors generally have neither the relevant qualifications nor the experience to make such an estimate.

The cost of obtaining an appropriately qualified person’s estimate of construction costs of a rental property is deductible in the income year it is incurred. You make your claim for the expense, or your share of the expense if you jointly incurred it, at Cost of managing tax affairs on your tax return.

For more information about construction expenditure and capital works deductions, see:

• Taxation Ruling TR 97/25 – Income tax: property development: deduction for capital expenditure on construction of income producing capital works, including buildings and structural improvements
• Rental properties – capital works deductions.

Cost base adjustments for capital works deductions

In working out a capital gain or capital loss from a rental property, the cost base and reduced cost base of the property may need to be reduced to the extent that it includes construction expenditure for which you have claimed or can claim a capital works deduction.

Cost base

You must exclude from the cost base of a CGT asset (including a building, structure or other capital improvement to land that is treated as a separate asset for CGT purposes) the amount of capital works deductions you have claimed or can claim in respect of the asset if:

• you acquired the asset after 7.30pm (by legal time in the ACT) on 13 May 1997, or
• you acquired the asset before that time and the expenditure that gave rise to the capital works deductions was incurred after 30 June 1999.

For information on when a building, structure or other capital improvement to land is treated as a CGT asset separate from the land, see chapter 1 and the section Major capital improvements to a dwelling acquired before 20 September 1985 in Guide to capital gains tax 2018.

Reduced cost base

The amount of the capital works deductions you have claimed or can claim for expenditure you incurred in respect of an asset is excluded from the reduced cost base.

For more information about whether you can claim certain capital works deductions, see:

• Taxation Determination TD 2005/47 – Income tax: what do the words ‘can deduct’ mean in the context of those provisions in Division 110 of the Income Tax Assessment Act 1997 which reduce the cost base or reduced cost base of a CGT asset by amounts you ‘have deducted or can deduct’, and is there a fixed point in time when this must be determined?
• Law Administration Practice Statement (General Administration) PS LA 2006/1 (GA) – Calculating cost base of CGT asset where there is insufficient information to determine any Division 43 capital works deduction.

Limited recourse debt arrangements

If expenditure on a depreciating asset (which includes construction expenditure) is financed or refinanced wholly or partly by limited recourse debt (including a notional loan under certain hire purchase or instalment sale agreements of goods), you must include excessive deductions for the capital allowances as assessable income. This will occur where the limited recourse debt arrangement terminates but has not been paid in full by the debtor. Because the debt has not been paid in full, the capital allowance deductions, including capital works deductions, allowed for the expenditure exceed the deductions that would be allowable if the unpaid amount of the debt was not counted as capital expenditure of the debtor. Special rules apply for working out whether the debt has been fully paid.

If you are not sure what constitutes a limited recourse debt or how to work out your adjustment to assessable income, contact your recognised tax adviser.

Prepaid expenses

If you prepay a rental property expense, such as insurance or interest on money borrowed, that covers a period of 12 months or less and the period ends on or before 30 June 2019, you can claim an immediate deduction. A prepayment that does not meet these criteria and is $1,000 or more may have to be spread over two or more years. This is also the case if you carry on your rental activity as a small business entity and have not chosen to deduct certain prepaid business expenses immediately.

For more information, see Deductions for prepaid expenses 2018.