Australia: Guidance on depreciation of composite items
Guidance identifying the correct depreciating asset
Guidance identifying the correct depreciating asset
The Australian Taxation Office (ATO) today released draft taxation ruling TR 2023/D2 which addresses the issue of whether an asset that is made up of a number of parts or components (i.e., a composite item) is itself a depreciating asset, or whether one or more of its components are separate depreciating assets.
A depreciating asset that is the composite item may have an effective life that is different than the effective life of any individual component or components. Identifying the correct depreciating asset is also relevant for determining eligibility for certain concessions that depend on the time a depreciating asset was first held or started to be used for a taxable purpose and whether the asset’s cost is under the specified threshold.
TR 2023/D2 replaces and withdraws draft taxation ruling TR 2017/D1.
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