An asset with an effective life of 20 years, acquired after 26 February 1992 and before 1 July 2001, is leased for 4 years. A residual value lower than those outlined in the applicable table may be used where a well considered and fair estimate of the likely market value of the item at the end of the lease would result in a lower value.ĥ. The minimum residual value should be calculated using the cost of the asset at the commencement of the total lease period.Ĥ. The first column in the table set out in paragraph 3A of this Determination titled 'Total leased period' provides that the minimum residual value should be calculated based on the total number of years the asset has been leased for, whether this has resulted from a single lease or multiple lease agreements. Minimum residual value as a percentage of cost = 75% - ģB. The figures in the above table follow the methodology set out in paragraph 2 of this Determination which can also be expressed as: Plant and machinery classified according to effective life in years Minimum residual values - percentage of cost ![]() A table based on effective lives, rather than depreciation rates, is set out below. It is not based on actual depreciation allowable, whether by the diminishing value method or at accelerated or broadbanded rates, although the table in IT 28 was set out, for convenience, according to prime cost depreciation rates.ģ. It is based on a straight-line amortisation of the cost of an item over its effective life, requiring a minimum residual value of 75% of the cost written down in that way. 20 of IT 28 is intended to be a rough guide to the minimum market value of items with different effective lives. The residual value of a leased item should reflect its market value at the end of the lease, not its written-down value.Ģ. However, this Determination does not apply to taxpayers to the extent that it conflicts with the terms of a settlement of a dispute agreed to before the date of issue of the Determination (see paragraphs 21 and 22 of Taxation Ruling TR 92/20).ġ. ![]() Unless otherwise stated, this Determination applies to years commencing both before and after its date of issue. Taxation Ruling TR 92/1 explains when a Determination is a public ruling and how it is binding on the Commissioner. Is a public ruling for the purposes of that Part. This Determination, to the extent that it is capable of being a 'public ruling' in terms of Part IVAAA of the
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