written-down value

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The value of an asset for tax purposes after taking account of its reduction in value below the initial cost, as a result of its use in the trade. An asset acquired for a trade is eligible for capital allowances. A writing-down allowance of 25% is available in the year of purchase, which is deducted from the initial cost to establish the written-down value. In the following year the written-down value is subject to the 25% writing-down allowance, which is deducted to arrive at the written-down value at the end of the second year.

Subjects: Accounting.

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