The general rule is that you must capitalise and claim depreciation on fixed assets used in your business that have a lifespan of more than 12 months and cost over $500 - depreciation allows for the wear and tear on a fixed asset and must be deducted from your income.
In some circumstances you can apply to the IRD and elect not to depreciate an asset, and not all fixed assets can be depreciated eg. land.
A fixed asset register must be kept to show which assets you are depreciating, displaying the depreciation claimed and resultant asset value for tax purposes. This "book value" is the asset's purchase price, less all depreciation calculated since purchase.
Please refer to the IRD Depreciation Guide for depreciation rates and methods of calculation. Please also refer to the to the IRD Depreciation Rate Finder to calculate depreciation on a business asset.
In most circumstances you can choose between the diminishing value and straight line methods of calculating depreciation - you do not have to use the same depreciation method for all assets, but you must use whatever method and rate you choose for an asset for the assets entire useful life.