Const.Methods-lect.4.pdf - Motivation 0931522-Construction...

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0931522-Construction Methods Depreciation Motivation How do owners of construction equipment account for the loss in value of their equipment assets? What formal methods are available? Definitions Depreciation: the loss in value of an item with age and is related to the notion of normal wear, tear, and obsolescence Annual depreciation: the loss in value each year used to adjust the book value and offset income tax obligations Definitions Book Value: initial cost (or purchase price) of an item minus the accumulated depreciation amount from the year of purchase through the year in question 1 Dr. Mujahed Thneibat
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Definitions Depreciation Accounting: the bookkeeping methods that are used to calculate depreciation of capital assets Depreciation accounting spreads the depreciable value of the equipment over the depreciation period eht ,.e.i , tnempiuqe eht fo efil cimonoce Purpose Depreciation accounting serves two purposes for the owner of construction equipment Reduces tax liability
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  • Fall '17
  • Nasser
  • Depreciation, Dr. Mujahed Thneibat, depreciation period eht, Depreciation accounting serves

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