# Calculate Australian asset depreciation

Calculate this year’s deduction and adjustable value for equipment, vehicles and other plant: instant asset write-off, the small business pool, or diminishing value and prime cost.

Canonical: https://aroai.com/tools/au_asset_depreciation/

## Tool reference

MCP tool ID: `au_asset_depreciation`. Availability: Live. Country: Australia.

Credit use: 1 credit.

## Input schema

```json
{
  "$schema": "https://json-schema.org/draft/2020-12/schema",
  "type": "object",
  "properties": {
    "asset_description": {
      "type": "string",
      "minLength": 1,
      "maxLength": 160
    },
    "asset_classification": {
      "type": "string",
      "minLength": 1,
      "maxLength": 160,
      "description": "Your selected asset class; the tool does not infer one from the description."
    },
    "asset_type": {
      "type": "string",
      "enum": [
        "equipment",
        "vehicle",
        "passenger_car",
        "building",
        "land",
        "intangible",
        "trading_stock",
        "other"
      ],
      "description": "Choose the asset type yourself. Buildings, land, trading stock and intangibles are outside this schedule."
    },
    "cost": {
      "type": "number",
      "minimum": 0.01,
      "maximum": 100000000,
      "description": "AUD cost; exclude GST to the extent an input tax credit is available."
    },
    "acquired_date": {
      "description": "Provide this or first_available_for_use_date; if omitted, the other date is assumed.",
      "type": "string",
      "pattern": "^\\d{4}-\\d{2}-\\d{2}$"
    },
    "first_available_for_use_date": {
      "description": "Provide this or acquired_date; if omitted, the other date is assumed.",
      "type": "string",
      "pattern": "^\\d{4}-\\d{2}-\\d{2}$"
    },
    "tax_year": {
      "type": "string",
      "enum": [
        "2025-26",
        "2026-27"
      ]
    },
    "business_use_percent": {
      "type": "number",
      "minimum": 0.01,
      "maximum": 100,
      "description": "Percentage used for a taxable purpose, from 0.01 to 100."
    },
    "small_business_entity": {
      "type": "boolean",
      "description": "Confirm eligibility to choose simplified depreciation for this income year, including turnover, method choice and lock-out conditions."
    },
    "existing_pool_closing_balance": {
      "description": "Required for small_business_pool: the existing pool's closing taxable-purpose balance from the prior income year, or 0 if there is no existing pool. Other current-year pool additions and disposals besides this asset are not included.",
      "type": "number",
      "minimum": 0,
      "maximum": 100000000
    },
    "method": {
      "type": "string",
      "enum": [
        "instant_asset_write_off",
        "small_business_pool",
        "div40_dv",
        "div40_pc"
      ]
    },
    "effective_life_years": {
      "description": "Required for Division 40; use the ATO effective-life determination or your supported self-assessment.",
      "type": "number",
      "exclusiveMinimum": 0,
      "maximum": 200
    },
    "effective_life_basis": {
      "type": "string",
      "enum": [
        "ato_determination",
        "self_assessed"
      ]
    },
    "car_cost_basis_after_current_limit": {
      "description": "For a passenger car, confirm cost is capped at the current ATO car limit where it applies.",
      "type": "boolean"
    }
  },
  "required": [
    "asset_description",
    "asset_classification",
    "asset_type",
    "cost",
    "tax_year",
    "business_use_percent",
    "small_business_entity",
    "method"
  ],
  "additionalProperties": false
}
```

## Example input

```json
{
  "asset_description": "Commercial coffee machine",
  "asset_classification": "Cafe equipment",
  "asset_type": "equipment",
  "cost": 14500,
  "acquired_date": "2026-09-10",
  "first_available_for_use_date": "2026-09-12",
  "tax_year": "2026-27",
  "business_use_percent": 100,
  "small_business_entity": true,
  "method": "instant_asset_write_off"
}
```

## Usage notes

- The per-asset instant write-off threshold for 2025-26 and 2026-27 is A$20,000.
- The asset class is not inferred from the description. With only a purchase or first-use date, the other is assumed to match.
- Enter cost excluding any GST you can claim.