Written-Down Value Explained: 2025 Guide for Australian Businesses

Written-down value (WDV) isn’t just a buzzword for accountants—it’s a practical tool that shapes how Australian businesses approach tax, asset management, and even lending decisions. With 2025 bringing fresh updates to depreciation rules and tax incentives, understanding WDV is more essential than ever for business owners, investors, and anyone managing business assets.

What Is Written-Down Value?

Written-down value is the current book value of an asset after accounting for depreciation. In Australia, it’s a cornerstone of how businesses track the true worth of everything from vehicles to machinery to IT systems. WDV reflects how much of an asset’s value has been ‘used up’—and is central to both tax claims and balance sheet accuracy.

For example, if a company buys a delivery van for $60,000 and claims $20,000 in depreciation over two years, the written-down value is now $40,000. This figure isn’t just for internal records: it’s the starting point for future depreciation, asset sales, and even loan security assessments.

How Is Written-Down Value Calculated in 2025?

There are two main depreciation methods used in Australia, each affecting WDV differently:

• Diminishing Value Method: Depreciation is calculated as a percentage of the asset’s opening WDV each year. This front-loads deductions—useful for assets that lose value quickly.
• Prime Cost Method: Depreciation is spread evenly over the asset’s effective life, reducing the WDV by the same amount annually.

In 2025, the ATO continues to update effective life schedules for various asset types, impacting how quickly assets are written down. Notably, temporary full expensing has ended, so businesses must revert to standard rules for assets acquired from 1 July 2024. This means a renewed focus on calculating and tracking WDV for each asset on the books.

Why Written-Down Value Matters in 2025

The implications of WDV go well beyond compliance:

• Tax Deductions: WDV is central to annual depreciation claims, directly affecting taxable income and cash flow.
• Asset Sales: When selling an asset, the difference between its sale price and written-down value determines any profit (taxable) or loss (deductible).
• Financing Decisions: Lenders often consider the WDV of equipment or vehicles when evaluating loan security or refinancing options.
• Business Valuations: Accurate WDV records are crucial during due diligence for mergers, acquisitions, or attracting investors.

For instance, a Melbourne-based logistics firm recently leveraged the updated WDV of its fleet to secure a competitive asset finance package, demonstrating the real-world impact of diligent asset tracking.

Practical Strategies for Managing Written-Down Value

Given the evolving tax landscape in 2025, here are some actionable ways to get the most from your WDV calculations:

• Review Asset Registers Annually: Ensure all additions, disposals, and depreciation methods are current and compliant with ATO guidelines.
• Optimise Depreciation Methods: Consider switching between diminishing value and prime cost where permitted to better match deductions to cash flow needs.
• Leverage Digital Tools: Modern accounting platforms can automate WDV tracking, making end-of-year reporting and finance applications smoother.
• Plan Asset Sales Strategically: Timing disposals when WDV is lowest can reduce capital gains and enhance after-tax outcomes.

Recent policy updates—including the end of temporary full expensing—make it more important than ever to review how your business tracks and manages WDV.

The Bottom Line: Stay Ahead with Smart WDV Management

Written-down value is more than a number on a spreadsheet—it’s a powerful lever for tax efficiency, smarter borrowing, and informed business decisions. As Australia’s asset depreciation rules continue to evolve in 2025, proactive management of WDV can unlock real financial benefits.