Immediately depreciating assets for investment boost policy (NZ)

The NZ government recently announced an initiative to allow businesses to instantly depreciate 20% of a newly purchased asset's value, in addition to standard depreciation. You cannot claim this investment boost depreciation for second-hand assets.

For more information on the policy, including examples, see Inland Revenue — New assets: Investment Boost.

Immediate depreciation in MYOB Exo Business

The best way of calculating the investment boost depreciation on an eligible asset is to split the asset in two:

A parent asset to depreciate at the normal rate until the end of its useful life.
A child asset to immediately depreciate the investment boost portion.

Once configured, the child asset will be fully depreciated in the first year, while the parent asset will depreciate at the standard rate, excluding the boost portion.

For example, say you purchased an asset for $10,000. With a 20% depreciation rate, you can immediately depreciate $2000 of this asset and then apply the standard depreciation rate on the remaining $8,000.

The following table explains how to set up the parent and child assets. For information about the basics of adding assets, see the MYOB Exo Business documentation. We also recommend that you get independent advice on how to process and claim the investment boost.

Asset	Settings
Parent	Set the acquisition cost to be the full purchase price minus the investment boost amount of 20%. For example, if you bought the asset for $10,000, the parent acquisition cost would be $8,000. Set the depreciation rate as normal for both Accounting and Tax Book.
Child	Set the acquisition cost to 20% of the parent asset’s full purchase price. For example, if you bought the asset for $10,000, the child acquisition cost would be $2,000. Link the child asset to the parent asset. Set Accounting Book depreciation rate as normal and the Tax Book depreciation rate to 100%.