Depreciation Schedule Calculator
Diminishing value or prime cost depreciation for practice equipment.
Asset details
Asset qualifies for instant asset write-off.
Schedule
- Total deduction
- $9,940
- Residual
- $60
| Year | Opening | Deduction | Closing |
|---|---|---|---|
| 1 | $10,000 | $4,000 | $6,000 |
| 2 | $6,000 | $2,400 | $3,600 |
| 3 | $3,600 | $1,440 | $2,160 |
| 4 | $2,160 | $864 | $1,296 |
| 5 | $1,296 | $518 | $778 |
| 6 | $778 | $311 | $467 |
| 7 | $467 | $187 | $280 |
| 8 | $280 | $112 | $168 |
| 9 | $168 | $67 | $101 |
| 10 | $101 | $40 | $60 |
Depreciation is the systematic allocation of an asset's cost over its effective life. For tax purposes, the two main methods are diminishing value (higher deductions early) and prime cost (equal deductions each year). The right choice depends on your tax position and how long you plan to keep the asset.
Diminishing value vs prime cost
Diminishing value applies a fixed percentage to the remaining value each year, so deductions are front-loaded. Prime cost spreads the same total deduction evenly across the effective life.
Diminishing value is usually better when you want larger deductions now — for example, when the practice is profitable and you want to reduce taxable income. Prime cost is simpler and gives predictable deductions.
Effective life rulings
The ATO publishes effective life rulings for different asset classes. Medical equipment typically ranges from 5 to 15 years depending on the item. You can use the ATO ruling or self-assess, but you must be able to justify your choice.
If you self-assess a shorter effective life than the ATO ruling, expect questions. If you use the ATO ruling, you are on safe ground.
Business use apportionment
You can only claim depreciation on the business-use portion of the asset. A vehicle used 70% for business gets 70% of the deduction. The same logbook used for fuel claims supports the depreciation percentage.
Frequently asked questions
What is the difference between diminishing value and prime cost?
Diminishing value applies 200% divided by the effective life to the remaining value each year, so deductions are front-loaded. Prime cost applies 100% divided by the effective life evenly across the asset's life.
Where do effective lives come from?
The ATO publishes effective life rulings for different asset classes. Medical equipment typically ranges from 5 to 15 years. You can use the ruling or self-assess, but you must be able to justify your choice.
Can I claim depreciation on the whole asset?
Only on the business-use portion. A vehicle used 70% for the practice gets 70% of the deduction, and the same logbook that supports fuel claims supports the depreciation percentage.
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This calculator provides general information only and is not tax advice. It does not account for your individual circumstances. Confirm figures against the relevant legislation or with a registered tax agent before relying on them for a lodgement.
Reviewed by eHealth Systems Pty Ltd