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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA TX-UK Exams › Chapter 5, Example 2
Dar tutor,
I would like to ask why we did not take only 18% of Car 1 balancing allowance – £2940
As we took 8% of the WDA for car 2 to arrive at the allowance.
Is this because balancing adjustments are treated differently?
Many thanks in advance
You have missed the point of a balancing allowance! It is not a WDA – p.34 section 7.1 note (c) tells you how to compute the balancing adjustment and it only arises here on the SALE of the non pool asset – car 2 has NOT been sold so a normal WDA is firstly computed based on the emissions of the car – this WDA is then restricted to the business use by the proprietor!