Asset Purchase Documentation

A new ute, a new oven or a new machine is one of the more satisfying purchases a business makes. The paperwork that comes with it is not. The invoice ends up in a glovebox, the finance contract sits in an email attachment, the installation bill lands in a different inbox — and two years later, when your accountant asks what the asset actually cost, nobody is quite sure.

Asset purchases deserve more care than everyday expenses because the records keep working for years, not months. Depreciation claims, GST credits, insurance claims and the eventual sale or trade-in all rest on the same small stack of documents.

The documents worth keeping

• The tax invoice showing the supplier, the full price and the GST component — not just the deposit receipt.
• The finance contract if the asset was financed — a chattel mortgage, loan or lease agreement shows the interest and fees that may be claimable over the term.
• Delivery and installation invoices, including freight, electrical work and commissioning costs.
• Evidence of the date the asset was first used or installed ready for use — a delivery docket, installation sign-off or first job record.
• Trade-in paperwork, because a trade-in is a disposal of the old asset as well as part-payment for the new one.

Why installation and delivery costs matter

The cost of an asset for depreciation purposes is generally more than the sticker price. Delivery, installation and the costs of getting it ready for use commonly form part of the asset's cost rather than an immediate deduction, so those invoices belong with the purchase file, not in the general expenses pile. The date the asset was first used or installed ready for use — not the invoice date — is generally what sets when depreciation starts, which is why a record of that date is worth keeping deliberately.

The instant asset write-off question

The instant asset write-off rules have changed several times in recent years, and whether a purchase qualifies for an immediate deduction depends on the threshold and eligibility rules that apply for that year — check the current threshold with the ATO or your accountant before assuming anything. The good news is that the documentation is the same either way: whether an asset is written off immediately or depreciated over years, the same invoice, contract and installation records support the claim.

Why an asset register earns its keep

An asset register is simply a list of what the business owns: each asset, what it cost, when it was bought and first used, and what eventually happened to it. It sounds like bureaucracy until you need it — at insurance time, at sale time, or when the accountant asks whether the trailer on the depreciation schedule still exists. Most accounting software maintains one with little effort.

What we commonly see go wrong

• The invoice issued in the wrong name — the director personally instead of the company or trust that should own the asset.
• Only a bank statement line as evidence, which shows a payment but not the asset, the GST or the split between the machine and its accessories.
• The finance contract never reaching the bookkeeper, so repayments are coded as an expense and the interest component is never separated out properly.
• Vehicles with private use and no record of the business-use split.
• Assets scrapped, sold or traded in without telling anyone, so the register and the depreciation schedule quietly drift away from reality.

A worked example

As an illustration: a landscaping business buys a second-hand excavator from a private seller, pays by bank transfer and keeps nothing but the transfer receipt. At tax time, the purchase is hard to substantiate — there is no document showing what was bought, from whom, or how the price split between the machine and its attachments. A one-page purchase agreement, photos of the serial number and a note of the delivery date would have taken ten minutes on the day and answered every later question.

When to get help

If you have bought significant equipment this year and the paperwork is scattered, if finance repayments are sitting in the accounts as a single expense line, or if nobody has looked at the asset register since the software was set up, it is worth tidying before year end rather than reconstructing afterwards. We see this often, and the fix is usually quick when the purchase is recent.

How long do I need to keep records for business assets?

Longer than everyday receipts. Records for a capital asset are generally kept for the whole time you own it and then for a further period after you dispose of it — generally 5 years from disposal, though it is worth checking the requirement for your situation. The purchase invoice you file today may be needed a decade from now.

Can I claim the full cost of equipment immediately?

Sometimes, under the instant asset write-off rules — but the threshold and eligibility criteria have changed several times, so check the current rules for the year of purchase rather than relying on what applied previously. The records you keep are the same either way.

I bought the asset on finance. What do I actually claim?

Generally the asset is depreciated (or written off if eligible) based on its cost, and the interest and certain fees under the finance contract are claimed separately over the term. The GST treatment depends on the type of contract. This is exactly why the finance contract itself needs to reach your bookkeeper or accountant.