Depreciation file:////home/vdimitrov/9626/d1bf189b8327196ee9dccbd6a6411a4e70f43e67.xls Lesson # 10-2 Context Fixed Assets Life-Cycle Topic Depreciation 1 Cost Basis Subtopic Straight-Line Method (SL) 2 Depreciation Subtopic Double Declining Balance Method (DDB) 3 Revenue and Capital Expenditures Subtopic Units of Production Method (UOP) 4 Disposals Pertinent Definitions Depreciation The allocation of the cost of an asset to expense over its useful life. Accumulated Depreciation (A/D) a "contra-asset" account paired up with an asset account that allows to keep it at historical cost. Depreciation Methods SL DDB UOP Cost Cost Cost- RV- Beg A/D- RV A = Depreciable Cost A = Beg BV A = Depreciable Cost B x Depreciable Rate* B x Depreciable Rate** C = Depreciation Per Period C = Depreciation Per Period # of Units "used" in Period C x Depreciable Rate*** [based on units] * 1/Life ** [1/Life] X 2 D = Depreciation Per Period *** Depreciation Per Unit: B
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