Assets and Depreciation

Treatment by Standard Ledger

We will record any asset purchases within the Xero Asset Register so that it is available for review / depreciation as part of end of year accounts / tax processing.

This includes asset purchases since the 12 May 2015 Budget – they will be regarded as 100% deductible, but it’s good practice to have a complete asset register.

For those that want to get technical ...


Under the ATO simpler depreciation rules for small businesses (turnover less than $2 million) guidelines, you can choose one of two methods:

  1. Use an asset pool approach where:
    1. Any asset < $1,000 you can an immediate depreciation writeoff (effectively an expense);
    2. For assets > $1,000 you claim 15% deduction in Year 1, and then 30% per year from then on
  2. (For all assets > $300), apply a straight line depreciation method over its effective life. Other than for a few specifc exclusions, you have the choice of either working out the effective life yourself or using an effective life determined by the ATO – these are published each year, with the latest being TR 2014/4. Typical examples of assets for most startups include:
  • Laptops                                       3 years
  • Office Furniture / Equipment         5 years


2015 Budget

Assets purchased and installed from 7.30pm (AEST) 12 May 2015 and 30 June 2017

In general, if you purchased and installed an asset from 7.30pm (AEST) and 30 June 2015, and you're turning over less than $2 million you can:

  • immediately write-off most depreciating assets costing less than $20,000

See TR 2015/2 - Income tax: effective life of depreciating assets (applicable from 1 July 2015)

ATO resources




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