Week 2 discussion questions

Week 2 discussion - Week 2 discussion What are the differences among valuation depreciation amortization and depletion Valuation mean the

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Week 2 discussion What are the differences among valuation, depreciation, amortization, and depletion Valuation mean the asset (investments or inventories) should be recorded and disclosed at current market price regardless of whether price is above or below cost. Depreciation means the allocation of the cost of asset (or tangible asset) to the periods in which services are received from the asset. Amortization means the systematic write-off / charged to expense of the cost of an intangible asset over the periods of its economic usefulness. Depletion mean the pro rata allocation of cost of minerals or natural resources to the units removed or occurred units. It computed by dividing the cost of the natural resources by the estimated available number of units. Is it appropriate to calculate depreciation using two different methods? Explain why or why not Companies are most widely use method of calculating depreciation is the Straight line method, for maintaining books of accounts and this method works as, an equal portion of the cost of an asset is allocated to each period of use. But for income tax purpose
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This note was uploaded on 06/24/2011 for the course ACCOUNTING 281 taught by Professor Prof.robinson during the Spring '10 term at University of Phoenix.

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Week 2 discussion - Week 2 discussion What are the differences among valuation depreciation amortization and depletion Valuation mean the

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