27‑85 Cost or opening adjustable value o27‑85 Cost or opening adjustable value of depreciating assets reduced: decreasing adjustments

#### 27‑85 Cost or opening adjustable value of depreciating assets reduced: decreasing adjustments (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.