Written down allowances-is this not the same thing as a capital allowance?
Or is written down allowance another term for depreciation?
Deferred tax is purely an accounting convention-it has no basis in tax law.
If you recognise more in the financial statements that you pay in tax, you have an asset. E.g. where you make a loss in the current year that can only be relieved future years.
If you recognise less in the financial statements than you are paying in tax, you have a liability. E.g. where the book value of machinery is higher than the tax written down value, i.e. depreciation is lower than capital allowances.
This is a useful [broken link removed].
Another one from the [broken link removed].
Both illustrate better than I can at this stage.
There's loads of useful info on the web-especially the ACCA and Big 4 websites.