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On practice question 11 – the vehicle sold part of the special rate pool is the only asset in that pool so I was thinking that the pool should end with 0 but it does not. Why do we keep a balance on a pool where all the assets have been sold ?
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As explained on page 30 of the lecture notes under the heading “Sale of Plant and Machinery”, the closing balance on a pool (whether general or special rate) is written down to nil only under two situations:
1) the business is being closed, OR
2) the closing balance is 1,000 or belowOther than these two situations, the pool balance is never written off, even if all the assets in the pool are sold.
Hope this helps.
Think I got confused here with the non pool items such private use and short life where when sold the balance is written off creating an allowance/charge.
Thank you for your help
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