1.11 Short Life Assets (SLA)

Question 1

What is a Short Life Asset (SLA)?

For example?

Answer 1

An asset where the predicted useful life is less than 8 years. For example, computer equipment.

Question 2

What assets are excluded from (SLA) short life asset treatment? x5

Answer 2

• Cars
• Ships
• Long Life Assets (LLA)
• Assets with partial non-business use
• Assets within the “special rate pool

Question 3

If a business acquires a Short Life Asset (SLA), what can it elect to do?

Answer 3

It can elect to depool that asset.

Question 4

What does depooling a Short Life Asset (SLA) do? Plus illustration

Answer 4

ILLUSTRATION NOT AVAILABLE

Question 5

What is the advantage of an asset being depooled? i.e. what will arise?

Answer 5

A balancing allowance will arise if the asset is sold at a loss within an 8 year period.

Question 6

What happens if the SLA is still in use after 8 years (ie after 9 lots of WDAs have been claimed on it)?

Answer 6

The written down value is transferred to the general pool.

Question 7

What will the sale of a (SLA) Short Life Asset give rise to?

Answer 7

A balancing adjustment