This discussion addresses the accounting treatment for depreciation when an asset, such as a truck bought in 2018-19, is lost during the 2022-23 financial year. It clarifies how to calculate annual depreciation and what portion of the remaining value should be recorded as a loss. The guidance also highlights the rule that depreciation is halved if an asset is used for less than 180 days in its first year of purchase.
20 August 2023
Where an asset acquired during the previous year and is put to use for the purpose of business or profession for a period of less than 180 days in that previous year, depreciation allowance shall be restricted to 50% of the amount calculated at prescribed rates