Pooled Assets

The use of the small business pool (to collectively depreciate assets rather than individually) is a rule under Division 328-D that simplifies record keeping because only one calculation is made per year, and only one total asset value is maintained.

New assets are added to the pool, and the pool is depreciated at a straight 30% per year regardless of the life of the combined assets.

This is very convenient, but the consequence of not being able to relate individual asset depreciation to their use in R&D means that the resulting pooled decline in value cannot be included as an R&DTI expenditure.

Once an asset is pooled, it cannot be extracted, so if there is a significant asset (for example a 3D printer bought for prototyping) then it may be worthwhile not including it in a pool, but applying Division 40 depreciation rules and claiming tax benefits for its eligible use under R&DTI.

As a rough guide, if the asset to be purchased is to be used more than 63% of its time for R&D then for a larger long term benefit (over the full asset life – but shortened by using the temporary full expensing rules) it is better to depreciate as a regular asset.