Income Tax Assessment Act 1997

CHAPTER 2 - LIABILITY RULES OF GENERAL APPLICATION  

PART 2-5 - RULES ABOUT DEDUCTIBILITY OF PARTICULAR KINDS OF AMOUNTS  

Division 27 - Effect of input tax credits etc. on deductions  

Subdivision 27-B - Effect of input tax credits etc. on capital allowances  

SECTION 27-85   Cost or opening adjustable value of depreciating assets reduced: decreasing adjustments  

27-85(1)    
This section applies to an entity if:

(a) the entity can deduct amounts for a ^* depreciating asset under Division 40 or 328 ; and

(b) the entity has a ^* decreasing adjustment in an income year that relates directly or indirectly to the asset.

27-85(1A)    
However, this section does not apply to a ^* decreasing adjustment that arises under Division 129 or 132 of the ^* GST Act.

Note:

See instead section 27-87 .

27-85(2)    
The asset ' s ^* cost is reduced by an amount equal to the ^* decreasing adjustment if the adjustment arises in the income year in which the asset ' s ^* start time occurs.

27-85(3)    

The asset ' s ^* opening adjustable value for an income year and its ^* cost is reduced by an amount equal to the ^* decreasing adjustment if the adjustment arises in that year and that year is after the one in which the asset ' s ^* start time occurs.

27-85(4)    
If the reduction under subsection (2) or (3) is more than:

(a) for a subsection (2) case - the ^* depreciating asset ' s ^* cost; or

(b) for a subsection (3) case - the depreciating asset ' s ^* opening adjustable value;

the excess is included in the entity ' s assessable income unless the entity is an ^* exempt entity.

Exception: pooling

27-85(5)    
This section does not apply to:

(a) a depreciating asset allocated to a low-value pool or a pool under Division 328 for or in the ^* current year; or

(b) ^* in-house software if expenditure on the software is allocated to a software development pool for the current year; or

(c) a project pool.