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Income Tax Assessment Act 1997
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Turn the raw legal text into a practical explanation grounded in Income Tax Assessment Act 1997.
(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. (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.
(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. (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. (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 (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.