ACCA Taxation (F6) Practice Exam

To which pools does the WDA for small pools not apply?

1. Main pools

2. Special pools

3. Single asset pools

4. Combined pools

The correct answer is: Single asset pools

The writing-down allowance (WDA) for small pools is a specific tax treatment that is designed to simplify the capital allowances process for small-value assets. The treatment applies to assets with a cost that falls below a certain threshold, enabling businesses to claim a more streamlined deduction. Single asset pools are not eligible for the WDA for small pools because this form of pool consists of individual assets that are tracked separately for capital allowances purposes. Each asset within a single asset pool typically has its own individual pool and the capital allowances are calculated on a case-by-case basis. Consequently, since the WDA for small pools pertains specifically to lower-value, groupings of assets rather than specific, individually procured assets, the allowance does not apply to single asset pools. In contrast, main pools and special pools are broader categories that consist of multiple assets, making them suitable for the application of the WDA for small pools. Combined pools also refer to a grouping of assets which could be eligible for such allowances, so they fall under the applicable conditions for the small pools.