Depreciation
This query is : Resolved
21 May 2010
how to calculate rate of depreciation under reducing balance method? Plz explain the procedure with clear steps.Thank you.
21 May 2010
Under reducing Balance method the Depreciation need to calcualte on the value = Gross asset value less Depreciation up to the previous period
Suppose a asset purchase Rs.10000 and Depreciation Rate 10 % Reducing balance method
1st year Depreciation is 10000X 10% = 1000
2nd year Depreciation is 10000-1000=9000x10%= 900
Suppose a asset purchase Rs.10000 and Depreciation Rate 10 % Reducing balance method
1st year Depreciation is 10000X 10% = 1000
2nd year Depreciation is 10000-1000=9000x10%= 900
21 May 2010
Thank You sir! but I wanted to know how to calculate rate of depreciation.Suppose Cost of an assest=105000,residual value=5000 useful life=10 years.How to know the rate of depreciation to be calculated under reducing balance method.
Thank You!
Thank You!
22 May 2010
Use the below formula
rate = 1 - (n * by the square root of R /C) * 100%
Where:
n = the number of years of useful life of the asset -
R= the estimated residual value of the asset
C= the cost of the asset
rate = 1 - (n * by the square root of R /C) * 100%
Where:
n = the number of years of useful life of the asset -
R= the estimated residual value of the asset
C= the cost of the asset
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