**First-year deduction for decline in value:**

- (a) Prime cost method: $6,000  
  *Working: $30,000 × (1 ÷ 5) = $30,000 × 0.2 = $6,000*

- (b) Diminishing value method: $12,000  
  *Working: $30,000 × (2 ÷ 5) = $30,000 × 0.4 = $12,000*

**Controlling authority:** Division 40 of the *Income Tax Assessment Act 1997* (ITAA 1997) – Capital allowances (decline in value of depreciating assets).