Studied by 0 people
Looks like no one added any tags here yet for you.
Useful Life of Asset
The estimated duration for which an asset is expected to be productive or useful.
Residual Value
The estimated value that an asset will realize upon its sale at the end of its useful life.
Straight Line Depreciation (SL)
A method of depreciation that charges an equal annual expense over the useful life of the asset.
Reducing Balance Depreciation (RB)
A method that produces the highest depreciation charge in the first year, decreasing in subsequent years.
Sum of Digits Depreciation (SoD)
A method of depreciation based on a fraction of the asset's total life during the year.
Units of Service Depreciation (UoS)
A depreciation method where charges are based on actual use of the asset.
Sum of digits calculation
(cost - residual value)/sum of digits X life at start of year
Straight Line Depreciation Calculation
(Cost - Residual Value) / life of asset
Reducing Balance Calculation
Rb rate x net book value of asset
units of service calculation
(cost-scrap) x (use in year/total use)
where is depreciation used
expense in income statement
