PROFESSIONAL DEVELOPMENT COURSE

Taxation of business assets from acquisition through to disposal.

Professional reference and assessment | 2026–27

Scope and reliance

This material provides general reference information on depreciation and capital allowance deductions under Australian income tax law. It covers the uniform capital allowances system, simplified depreciation for small business entities, the instant asset write-off, general small business pooling, selected intangible and business-related capital expenditure, capital works and the car depreciation limit. The applicable treatment depends on the identity of the holder, the nature and use of the asset, the date it is first used or installed ready for use, the relevant statutory threshold and the taxpayer’s elections. It does not constitute taxation, legal, superannuation or financial advice.

Course overview

The material develops a structured approach to classifying business assets, determining the correct capital allowance regime, calculating decline in value and accounting for disposal consequences. It also addresses simplified depreciation, software, business-related capital expenditure, capital works, passenger vehicles, composite assets and record keeping.

The content is organised into five lessons that progress from Division 40 foundations to applied asset review and year-end reconciliation. Native Word tables, worked calculations, practical scenarios, flowcharts and the final assessment support application by tax agents, Business Activity Statement agents, public practitioners and other professional advisers.

Course objectives

Explain the Division 40 framework, asset cost, taxable use, start time and effective life requirements.
Apply the prime cost, diminishing value, low-value pool and balancing adjustment rules.
Determine eligibility for simplified depreciation, the instant asset write-off and the general small business pool.
Classify software, business-related capital expenditure, capital works, passenger cars and composite assets correctly.
Maintain a complete tax asset register and reconcile capital allowance outcomes from acquisition through to disposal.

Learning outcomes

You should be able to distinguish accounting depreciation from the income tax deduction and identify the governing tax provision.
You should be able to calculate decline in value and pool deductions using the applicable rates and methods.
You should be able to apply the current-law and proposed-law distinction for the 2026–27 instant asset write-off.
You should be able to identify when Division 40, Subdivision 328-D, Division 43, section 40-880 or a software rule applies.
You should be able to document asset classification, use, cost, disposal and reconciliation conclusions in professional workpapers.

Professional use

Accounting depreciation does not determine the income tax deduction. Each asset and expenditure item must be classified under the applicable tax provision, with the holder, start time, taxable use, cost, effective life, elections and records considered before lodgement.

CPD/CPE compliance mapping

The mapping below identifies how the learning outcomes align with common technical and professional development expectations. It does not determine the content or replace the requirements of any professional or regulatory body.

Lesson	CPA Australia	CA ANZ	IPA	Tax Practitioners Board
Division 40 foundations	Australian taxation technical knowledge, capital allowance calculations and professional judgement.	Tax technical competence, statutory classification and evidence-based application.	Applied income tax and asset accounting knowledge.	Tax law knowledge relevant to competent tax agent services and record keeping.
Disposals and simplified depreciation	Balancing adjustments, small business concessions and current-law analysis.	Application of tax calculations, legislative status and integrity requirements.	Practical small business taxation and compliance knowledge.	Competent treatment of depreciation concessions and disposal consequences.
Software and capital expenditure	Technical treatment of software, start-up and residual capital expenditure.	Revenue and capital classification and application of specific provisions.	Business taxation and professional judgement.	Accurate application of capital expenditure rules in client services.
Capital works and asset limits	Capital works, motor vehicle limits and asset identification.	Professional analysis of Division 40, Division 43 and composite assets.	Applied asset taxation and calculation skills.	Maintaining current technical knowledge and evidence-based workpapers.
Asset records and professional review	Tax asset register governance, reconciliation and quality control.	Documentation, review and professional competence.	Practical compliance and record-keeping procedures.	Competent tax agent services, lodgement preparation and record retention.