Question
Methods of calculating depreciation
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GPT 3.5
1. Straight-line depreciation: This method evenly allocates the cost of an asset over its useful life. The formula is (Cost of Asset - Salvage Value) / Useful Life.
2. Double declining balance: This method calculates depreciation at twice the rate of the straight-line method. The formula is (2 x Straight-line rate) x Book value at beginning of year.
3. Units of production: This method calculates depreciation based on the number of units produced or hours of operation. The formula is (Cost of Asset - Salvage Value) / Total expected units or hours.
4. Sum-of-the-years-digits: This method accelerates depreciation by allocating more depreciation in the early years of an asset's life. The formula is (Remaining useful life / Sum of the years digits) x (Cost of Asset - Salvage Value).
5. Activity-based depreciation: This method calculates depreciation based on the actual usage or activity level of the asset. The formula varies depending on the specific activity or usage measurement.
6. Group depreciation: This method groups similar assets together and calculates depreciation for the group as a whole. The formula is (Total cost of assets in group - Salvage Value) / Total useful life of assets in group.
7. Composite depreciation: This method calculates depreciation for a group of assets that are not necessarily similar, but can be depreciated together for simplicity. The formula is (Total cost of assets in group - Salvage Value) / Total useful life of assets in group.
2. Double declining balance: This method calculates depreciation at twice the rate of the straight-line method. The formula is (2 x Straight-line rate) x Book value at beginning of year.
3. Units of production: This method calculates depreciation based on the number of units produced or hours of operation. The formula is (Cost of Asset - Salvage Value) / Total expected units or hours.
4. Sum-of-the-years-digits: This method accelerates depreciation by allocating more depreciation in the early years of an asset's life. The formula is (Remaining useful life / Sum of the years digits) x (Cost of Asset - Salvage Value).
5. Activity-based depreciation: This method calculates depreciation based on the actual usage or activity level of the asset. The formula varies depending on the specific activity or usage measurement.
6. Group depreciation: This method groups similar assets together and calculates depreciation for the group as a whole. The formula is (Total cost of assets in group - Salvage Value) / Total useful life of assets in group.
7. Composite depreciation: This method calculates depreciation for a group of assets that are not necessarily similar, but can be depreciated together for simplicity. The formula is (Total cost of assets in group - Salvage Value) / Total useful life of assets in group.
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