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Re: depreciation

Newbie

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Hi there 

 

RE: Low pool value – instant asset write-off

 

Assuming my opening Small business pool is $100k @01/07/2019, my depreciation expense @ 30/06/2020 is $30k. therefore my closing Small business pool is $70k. 

under the rule Low pool value – instant asset write-off, From 12 March 2020, the instant asset write-off threshold increased to $150,000. As the balance of the pool is less than the threshold at the end of the income year, i will write off the entire pool balance in  2019–20 income tax return.

Question: Is there any rule we can adopt to not write it off? so that i can minimise my current year loss or enjoy the untaxable $18200 threshold. 

 

Thanks and appreciate for your contribution Smiley Happy

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Most helpful response

ATO Community Support

Replies 0

Hi @Ratana,

 

Under the simpler depreciation for small business rules, you deduct the balance of the small business pool if the pool (before applying the depreciation deductions) is less than the threshold.

 

This means in the example provided, you have to write the whole balance off. This is because the balance before depreciation ($100k) was under the threshold.

 

When you choose a depreciation method, you must apply all the rules. Under simpler depreciation, you must write-off the pool if it is below the threshold.

 

If this results in the business running at a loss, you can defer the loss to offset against profits in later years.

 

You can read more about simpler depreciation for small business and deferring your loss on our website.

1 REPLY 1

Most helpful response

ATO Community Support

Replies 0

Hi @Ratana,

 

Under the simpler depreciation for small business rules, you deduct the balance of the small business pool if the pool (before applying the depreciation deductions) is less than the threshold.

 

This means in the example provided, you have to write the whole balance off. This is because the balance before depreciation ($100k) was under the threshold.

 

When you choose a depreciation method, you must apply all the rules. Under simpler depreciation, you must write-off the pool if it is below the threshold.

 

If this results in the business running at a loss, you can defer the loss to offset against profits in later years.

 

You can read more about simpler depreciation for small business and deferring your loss on our website.