Depreciation
This query is : Resolved
Dhananjay Singh
(Querist)
11 January 2014
please tell me about SLM and WDV method of depreciatio when we use slm method WDV vice versa
11 January 2014
In Written Down Value (WDV) method
depreciation is charged on the reuced
price. Example: Asset purchased for Rs.
100.00: Depreciation rate 10%. First year
its value will be reduced to 90.00
(100-10% of 100) and in second year
depreciation will be Rs. 9.00 i e 10% of
90. Similarly third year it will be Rs.
8.10. This way the value of asset never
comes at Zero.
depreciation is charged on the reuced
price. Example: Asset purchased for Rs.
100.00: Depreciation rate 10%. First year
its value will be reduced to 90.00
(100-10% of 100) and in second year
depreciation will be Rs. 9.00 i e 10% of
90. Similarly third year it will be Rs.
8.10. This way the value of asset never
comes at Zero.
11 January 2014
In Straight Line Method (SLN) life of a
asset is known then for the duration of
life ever year an equal sum is taken as
depreciation. Example Asset purchased
for Rs. 100.00 Life ascertained 8 years
and then every year a sum of Rs. 12.50
is charged to Depreciation and after 8th
year its book value will be zero.
WDV method is strongly recommended.
asset is known then for the duration of
life ever year an equal sum is taken as
depreciation. Example Asset purchased
for Rs. 100.00 Life ascertained 8 years
and then every year a sum of Rs. 12.50
is charged to Depreciation and after 8th
year its book value will be zero.
WDV method is strongly recommended.
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