If a bought an item costing $250,000including gst for business purposes soley and wanted to deduct using the Prime cost and diminishing value system what cost base would i use? I think its 250000- 10% gst but what happens if i replaced a part costing $700(computer chip) and only had the item for 1 month before end of financial year. And if i made repairs on that item costing 2100 could i deduct that into original equasion? does anyone know the correct equation. hope this gets your minds thinking as i cant do it.
Hi I’m not an accountant but I think it goes something like this. The cost base would be $250K minus one eleventh. Repairs at $1000 or whatever figure should be deductable this FY. If you spend $ on improving the system then this would be considered as capitol i.e. it would add to the cost base and depreciated over the allowable time frame set by the ATO. You should check out the ATO website.
Hope this helps.
hrm
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