How are the effective lives’ for Plant & Equipment elements determined?

The ATO defines the effective life of a depreciating asset is how long it can be used by any entity for a taxable purpose, or for the purpose of producing exempt income or non-assessable non-exempt income

  • having regard to the wear and tear you reasonably expect from your expected circumstances of use,
  • assuming that it will be maintained in reasonably good order and condition, and
  • having regard to the period within which it is likely to be scrapped, sold for no more than scrap value or abandoned. (
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