| Summary: | Currently, Australia’s uniform capital allowance system does not include a single
mechanism for recognising the cost of intangible wasting assets. Instead, it has
a number of separate and to some extent inconsistent regimes for different types
of assets recognised by statute. It has been suggested that Australia should adopt
a single mechanism to enable the tax system to accurately measure net income.
However, implementing this suggestion would be ineffective without an in-depth
understanding of the existing depreciation rules that apply to certain types of
intangible assets. This article examines the history of the rules relating to four
categories of depreciating assets and the policies underlying them: 1) rights and
information in the resource industry; 2) intellectual property, other than trademarks,
protected by statute; 3) in-house software; and 4) statutory or contractual rights
relating to media and telecommunications. While these intangible wasting assets
differ significantly, reviewing the depreciation rules for each category provides
useful insights for building a new universal depreciation regime that can apply to all
intangible wasting assets.
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