Sum - one through the number of years in the asset's useful...

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Sum-of-the-years'-digits depreciation.  Equipment and vehicles often provide greater benefits  when they are new than when they approach the end of their useful lives and more frequently require  repairs. Using  sum-of-the-years'-digits depreciation  is one way for companies to assign a  disproportionate share of depreciation expense to the first years of an asset's useful life. Under this  method, depreciation expense is calculated using the following equation.      Calculating Sum-of-Year's-Digits Depletion The equation's denominator (the sum of the years' digits) can be found by adding each integer from 
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Unformatted text preview: one through the number of years in the asset's useful life (1 + 2 + 3) or by substituting the number of years in the asset's useful life for x in the following equation. The sum of the years' digits for an asset with a five-year useful life is 15. Therefore, depreciation expense on the asset equals five-fifteenths of the depreciable cost during the first year, four-fifteenths during the second year, three-fifteenths during the third year, two-fifteenths during the fourth year, and one-fifteenth during the last year....
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This note was uploaded on 11/14/2011 for the course ACCT 1310 taught by Professor Staff during the Fall '10 term at Texas State.

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Sum - one through the number of years in the asset's useful...

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