Software Development Pool (5 year) 2024

There has been a change to the write-off life of the Software development pool effective from 1 July 2015 where the life of the pool is increased to 5 years with following depreciation rates each year.

For expenditure incurred from 1 July 2015:

Year	Depreciation rate
Year 1	Nil
Year 2	30%
Year 3	30%
Year 4	30%
Year 5	10%

For more details, see the ATO In-house software resources.

Details tab

When you click Create 5 year SWDP, details of the software development pool need to be established, and integration to the tax return (either directly or via another worksheet) also needs to be established.

Field	Description
Description	Enter a description of the pool. Press F7 to select a Standard answer, or type the description.
Number	If this is the first pool, this field defaults to number 1. If you create more than one pool, number them in sequence. The software development pool number is included in the other pool numbering sequence. For example, if you already have a General Small Business pool, number 2 will be assigned to Software Development pool (5Yr) when it is created.
Income year pool commenced	This is the year where the software development pool commenced. The decline value will be calculated based on this year.
Current year	Current Tax year of the return.
Expenditure incurred in year 1	All the expenditure incurred in year 1 for the software development in the following categories Software costs Licensing costs Other costs
Opening balance (OWDV)	The opening balance is calculated from the second year onwards.
Decline in value	The opening balance is automatically calculated based on the information given from the second year onwards. Decline in value for the first year is always zero.

Integration tab

This function allows you to indicate the point in the return or another worksheet, that the amount calculated should be integrated.

Press F10 and select from the list of forms and schedules. The integration points provided will be relevant to the form type being prepared.