Depreciation
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6 Terms
1
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What is depreciation?
the gradual decrease in value of an asset over its useful life
2
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how is depreciation shown in the SOPL?
it is shown as an expense and decreases profits
3
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how is depreciation shown in the SOFP?
it decreases the value of non-current assets
4
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straight line method formula 1
cost of asset- residual value/ useful life
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straight line method formula 2
(cost - residual value) x %
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Diminishing method formula
depreciation = depreciation rate % x carrying amount
Note 
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