hardikpatel

 Profile Answers by hardikpatel Questions by hardikpatel

• Feb 20th, 2009

 

Methods for depreciation are
1) Straight line Method & 2) WDV

koolbuzzjj

 Profile Answers by koolbuzzjj 

• Sep 3rd, 2009

 

Types of Depreciation

1) Straight Line Method
2) Written down value method

Straight Line Depreciation Calculation
(Purchase Price of Asset - Approximate Salvage Value) ÷ Estimated Useful
Life of Asset

Example: You buy a new computer for your business costing approximately
$5,000. You expect a salvage value of $200 selling parts when you dispose of it.
Accounting rules allow a maximum useful life of five years for computers. In the
past, your business has upgraded its hardware every three years, so you think
this is a more realistic estimate of useful life, since you are apt to dispose
of the computer at that time. Using that information, you would plug it into the
formula:

($5,000 purchase price - $200 approximate salvage value) ÷ 3 years estimated
useful life
The answer, $1,600, is the depreciation charges your business would take
annually if you were using the straight line method.

Written down Value method
Diminishing Balance Method or Written Down Value Method
Under this method, depreciation is charged at a fixed rate every year but on
reducing balance i.e., on balance reduced each year during the economic life of
the asset by the amount of depreciation till the asset is reduced to its scrap
value.

For example, if the cost of the asset is Rs. 1,000 the rate of depreciation
is 10 % on Rs. 1,000 i.e., Rs. 100, in the second year, it will be 10 % on Rs
900 i.e., Rs. 90 is the third year, it will be 10 % on Rs 810 (900-90) i.e., Rs.
81 and so on.

naina goel

• Sep 13th, 2011

 

There are 4 types of depreciation. They are
1. Fixed Instalment method or straight line method
2. Diminishing Balance method or written down value method 3. Annuity method
4. Depreciation Fund method

fathima

• Sep 18th, 2011

 

There are 6 types of depreciation Viz

1. SLM method
2. WDV method
3. Annuity method
4. Insurance policy method
5. Revaluation method
6. Depreciation fund method or sinking fund method

DIBYENDU SUNDAR RAY

• Oct 13th, 2011

 

Methods of depreciation are

1. Straight line method
2. Diminishing balance method
3. Annuity method
4. Revaluation method
5. Depletion method
6. Depreciation fund method
7. Insurance policy method
8. Sum of the digits method
9. Machine hour rate method
10. Kilometer method

simssaurabh

 Profile Answers by simssaurabh 

• Oct 16th, 2011

 

DEPRECIATION METHODS:
Fixed assets differ from each other in their nature so widely that the same depreciation methods cannot be applied to each. The following methods have therefore been evolved for depreciating various assets:
1. Fixed installment or Straight line or Original cost method.
2. Diminishing Balance Method or Written down value method or Reducing Installment method.
3. Annuity Method.
4. Depreciation fund method or Sinking fund amortization fund method.
5. Insurance policy method.
6. Revaluation method.
7. Sum of the year's digits method (SYD).
8. Double declining balance method.
9. Depletion method.
10. The basis of use system.
Fixed installment method is also known as straight line method or original cost method. Under this method the expected life of the asset or the period during which a particular asset will render service is the calculated. The cost of the asset less scrap value, if any, at the end f its expected life is divided by the number of years of its expected life and each year a fixed amount is charged in accounts as depreciation. The amount chargeable in respect of depreciation under this method remains constant from year to year. This method is also know as straight line method because if a graph of the amounts of annual depreciation is drawn, it would be a straight line.

Ashrita sahoo

• Nov 2nd, 2011

 

SLM method & WDV method

vinod kumar reddy

• Nov 15th, 2018

 

Types of depreciation methods:

Straight line method
Diminishing balance method
Sinking method
Annuity method
Sum of years method