You may be able to claim a deduction for the decline in value (depreciation) of a depreciating asset that you buy for your business.

A depreciating asset is an item that has a limited life expectancy (effective life) and declines in value or depreciates over the time it’s used.

Examples of depreciating assets are computers, electrical tools, photocopiers, furniture, carpets, curtains and motor vehicles.

Generally, you can claim a deduction for the decline in value of a depreciating asset for each year over its effective life.

The amount that you can claim as a depreciation deduction is determined by how much you use the asset for business purposes.

You can apply the general depreciation rules to calculate your deduction for most assets. If you are a small business entity, you can use the simplified depreciation rules.