A $$depreciating asset, is defined in Section $40\mathrm{.}30$ of the Income Tax Assessment Act $1997,$ is an asset that has a limited effective life and is expected to decline in value over the time it is used. This concept is important for tax purposes, as businesses can claim depreciation on such assets to reduce their taxable income. The decline in value can often be calculated using methods such as straight$-$line depreciation or diminishing value methods. The asset that is excluded from being characterised as a depreciating asset is land and intangible unless listed in $40-30(2)$ of the ITAA $97.$ Land is excluded because the value of land is not expected to decline over time. computer, printer and furniture can be considered as depreciating asset under s$\mathrm{.}40-30(1)$ of the ITAA $97.$ In the bank Statement of Cash Receipts and payment, the $$15,000$ cost of the assets $($Furniture $$& chairs, computers, and printer $)$ would be given an effective life under Tax Ruling $2020/3$ and the cost of these assets would decline in value over that time, allowing Darly to deduct the portion of the cost from his assessable income.

This indicates that the deductible expenses first year $$for furniture $$total $$1,565,$ This amount would reduce assessable income in the $2024/2025$ financial year.