When later sold the difference between actual proceeds and the written-down value becomes income, or further deduction.

If the capital asset is sold before the end of its useful life, there may be a gain or loss relative to its written-down value.

For simplicity, the example assumes that the company scraps the asset in 1996 and receives a balancing allowance equal to the tax written-down value.

The risk for the vendor of assets is the possibility of balancing charges if the assets are sold for more than their written-down value.

Before disposal of an asset, pooling makes no difference to the written-down values of the assets compared with no pooling.

With pooling, the proceeds from the sale of an asset are deducted from the written-down value of the pool and there is no balancing allowance.

The net, or written-down value of a fixed capital asset is equal to its current replacement cost, less CFC accrued up to that point in time.

When deductions are claimed for depreciation of an asset, and it's later sold, there a balancing adjustment to be made for the proceeds versus the written-down value.

The written-down value (abbreviated as WDV) is the depreciated value of an asset (movable or immovable) for purposes of taxation.

In the usual case that the proceeds are less than the original cost, then any difference between proceeds and written-down value is income or further deduction and CGT does not apply.

If however, the proceeds are greater than the original cost, then the amount between the written-down value and the original cost is income, and the proceeds above that are a capital gain.

One example of this is the declining balance method, in which depreciation is recorded as a constant proportion of the depreciated book value (or written-down value) over the anticipated life of the asset.

With plant and equipment, the capital allowance is determined using the 25 per cent declining balance method (over 8 years); i.e., the writing-down allowance is 25 per cent of the written-down value, as illustrated above.

In this case, the cost of a new asset is added to the accumulated written-down values of the firm's existing assets and the writing-down allowances are determined by the aggregate of the written-down values.

To avoid any appearance of having noticed Strode's interest I tried to concentrate on the balance sheet, but the mass of figures meant very little to me, though I did notice that the cost of the fleet was not given, only the written-down value, which as Latham had said was just over a million.