A list of fixed assets showing opening value of the assets, date of acquisition with its location, make, model and serial no alongside with depreciation amounts and writting down values. It is generally used by property managers or accountants to keep track of assets within the building for maintenance and tax depreciation purpose. It is a detailed version of the tax depreciation schedule, commonly requested by property owners in Commercial Industry.
Under the Income Tax Assessment Act 1997, The Australian Tax Office (ATO) allows incoming producing businesses to claim deduction for depreciation against company income tax.
Depreciation which is claimable under this legislation are Plant and Equipment - Division 40 and Capital works deductions - Division 43.
Property acquisition / Purchase
Purchasing commercial building as incoming producing assets, property owners are entitled to claim depreciation on Division 40 plant and equipment and also Division 43 depending on the age of the building.
Expenditure on Construction or offices fit-out
Landlords (Lessors) who contributed fit-out incentive to tenants (Lessees) are entitled to claim depreciation on these expenditure therefore reduce their taxabile income. Tenants who incurred expenditure on fitting out offices are entitled to claim depreciation on their parts. Our expertise is to split Lessors/Lessees' assets according to their lease agreement and incentive amount etc.
Treatment on hotel building acquisition
Our expertise in allocating assets between property assets and operating assets to reflect the ownership and purchase price respectively.
An asset which has limited effective life reasoanably be expected to to decline in value over the time it is used. The effective life of these assets are varying according to its uses and industry such as residential, offices, hotel, industrial warehouse, manufacturing factory etc.
Examples of plant and equipment are: -
✓ Automated sliding door
✓ Chiller AHU Cooling tower
✓ Communications BMS
✓ Distribution board
✓ Door mat
✓ Electric motors
✓ EWIS speaker
✓ Exhaust fan
✓ Fire hose reel
✓ Fire hydrant pump
✓ Fire indicator panel
✓ Freestanding furniture
✓ Hot water unit
✓ Manual call point
✓ Master emergency control panel
✓ Proximity reader
✓ Smoke detector
✓ Stair pressurisation fan
✓ Telephone system
✓ Venetian blinds
✓ Warden intercom phone
✓ Water pump
✓ Vinyl flooring
✓ Concrete structure
✓ External walls
✓ Partition and doors
In compliance with ATO, our effective lives used are based on the Commisioner of Taxation rates.
Tax deduction for the building structure and fitings that are permanently fixed to the structure of the building which attracts low depreciation rate at 2.5% or 4% over a period of 40 or 25 years, depending on the property use and its industry. The depreciation of Capital Works deductions are based on historical construction costs, its age and use of the building at the time.
Examples of Commercial's Division 43 are: -
Timeline for Capital Works Deductions with depreciation rate based on the original construction costs.