DEALING WITH DEPRECIATION
A recent meeting held by the CMPA and sponsored by Jaques presented members with the possible impacts of the new Effective Lives for Quarry Plant and Equipment.
The meeting was perceived as being very successful with many positive comments from the attendees and the presenters.
Over 50 members and their accountants attended with informative presentations delivered by, ATO representative David Matheson and W Marshall and Associate’s Doug Cameron.
According to Mr Matheson, “The meeting crystallised in the minds of attendees the importance of taxation capital allowance provisions to capital intensive industries such as Quarrying.”
Both Mr Cameron and Mr Matheson stressed to members the fact that they have choices to make in relation to depreciation (decline in value) of their equipment. Those choices are whether to use:
- the Prime Cost method or the Diminishing Value method; and
- the effective lives determined by the Commissioner or to self assess the effective life.
“These choices need to be made by the Quarry owner after full consideration of the alternatives. These decisions should not be delegated to the accountant that prepares the income tax return. However, the decision to self assess the effective life of an asset or group of assets must be based on a reasonable belief that the asset’s particular circumstances of use will result in a shorter effective life than that determined by the Commissioner.” said Mr Matheson.
CMPA chairperson, Mr Grant Phillips commented that “Invaluable knowledge was gained by those present and it was delivered at an understandable level.” Mr Phillips only disappointment was that more members did not attend as “the presentations were extremely beneficial from both a business and industry perspective.”
Those at attendance at the meeting will receive draft minutes for approval before Christmas prior to distribution for the information of all members early next year.
A special thank you to meeting sponsors Jaques, presenters David Matheson and Doug Cameron, patron Prof Ross Williams and all members, non-members and their accountants who attended. attended.worthwhile.
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