Machines | Depreciation Methods (Straight Line, Sum Of Years Digits, Declining Balance Calculations)
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Accounting for depreciation with the straight line method, sum of years digits method and declining balance method, example shows how to calaculate depreciation expense using each of these methods, for (1) straight line method calculate the full year based on (1/1) fiscal year determine the depreciation charge (cost minus salvage value divided by service life equals the depreciation charge per period, with straight line depreciation, depreciation expense is a function of time rather than a function of usage, (2) sum of years digit method calculate the depreciation fraction as the sum of years for the depreciation period or as the equation (n(n+1)/2 = sum of years), use the sum of years as the denominator dividing it into the remaining life and multiplying the fractional amount times the depreciation base equals the depreciation for the period, (3) using the declining balance method do not deduct the salvage value from the cost for computing the depreciation base, the depreciation rate is based on a percentage (multiple) of the straight line depreciation rate, double declining balance would be two times the straight line depreciation rate, depreciation expense for the period is calculated by multiplying the declining balance rate times the book value (carrying value) for the asset for each period, detailed calculations by Allen Mursau
Comments
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when he refers to the Sum Of Years Digits method does he meanthe Units-of-activity method
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Thank you so much 😁 This video can make me understand moreover, when i want to doing by myself. Thanks
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thanks alot. very good explaining. but the i keep losing concentration on the video because the voice record was not so good. abit annoying. sorry .
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Your videos are simple to follow. I can't say that for my textbook.
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What if you plan to purchase 5 of the product but only one per year with 4 years depreciation each, and factor in all purchases within 8 years?
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Awesome, thank you. Much better than the text book.
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super explain .. thank you so much
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Thank u .. Superrrrr explain
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Thank you, Allen, you are so helpful, I could understand so easy then my books.
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thankyou so much. really helped :)
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Finally i got to understand Depreciation easily thanks to your explanation. Great work.
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THANKS!
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the purchase date is 10/1/20xx wouldnt that affect the depreciation expense for that year?
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thank you very much...everywhere i searched it was very complex...this really helped me a lot. using ur method i got A+. god bless you dude.
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I undrestund now the depreciation thank u a lot
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Thanks, this is the easiest and most self explanatory one I have seen dust far.
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This video is very educational, it was easy to understand, it helped cleared up the depreciation methods. Thank you
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how about declining balance which is not double? we just have to find straight line rate only?
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what if it just says P.a ? per annum
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Very good, easy-to-understand instructional video. Thank You!