The ATO supported methods to calculate depreciation on plant and equipment assets for your investment properties are, (i) prime cost method (ii) diminishing value method.

In the first method, an assumption is made that the assets experience is should also be considered to claim returns on wear and tear, and deterioration overtime as its life of utility gets influenced too. This is why a constant rate is in use here. Here dividing 100% by an asset's worthy life in years gives the tax depreciation results.

The second, diminishing value method assumes that the assets wear down more in the first years of their utility and so they make possible high depreciation write offs in the initial phase, and decreased depreciation as time passes during the asset's life span. Dividing 150% by an asset's functional life in years gives the computation results in this method. ATO guidelines must be respected to discover depreciation rates and the conventional working lifespan of assets.