Balancing allowance

In simplified investment-appraisal questions, a balancing allowance often equals tax written-down value less qualifying disposal proceeds. Its cash effect is the allowance multiplied by the tax rate, assuming relief is usable, at the correct tax payment date. Real tax systems may pool assets, cap disposal values or allow a balancing allowance only on particular events such as cessation. Therefore a sale below tax written-down value does not universally produce an immediate allowance. Use the question's rules for FM and the separately dated statutory rules for tax exams.