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ATO Depreciation

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could anybody shed some light on depreciation and the process of claiming it

eg. i buy outright a 40k piece of machinery

how much can claim 1st yr, 2nd yr etc
thanks
 

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Re: depreciation ATO

could anybody shed some light on depreciation and the process of claiming it

eg. i buy outright a 40k piece of machinery

how much can claim 1st yr, 2nd yr etc
thanks
There are a couple of accepted methods, and it will be in part based on the expected life of the machinery.

I would talk to your account to work out what best.

One method is to write it off using the straight line method where you write of a fixed amount each year eg $4,000 per year for 10 years.

or you may write of a percentage each year, eg 10% of book value per year, so $4000 in the first year, $3,600 in the second, and so forth, claiming a smaller amount each year.
 
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Re: Depreciation ATO

thanks, and this comes off your gross turnover, so in basic terms its like getting an invoice(claim) from a supplier?
 
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Re: Depreciation ATO

There are different rates of depreciation depending on the type of machinery and it's likely life, you can get them off the ato site. If you're a small business you can use the simplified depreciation rules where you place the asset in a depreciation pool and depreciate the asset at 15% the year of purchase then 30% every year thereafter, no matter what the life of the assett.
There is a special entry for depreciation in Etax where you enter your result.
Disclaimer, not an accountant.
 

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