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Depreciation rate

Neeti (CA Final) (327 Points)

20 May 2016  

How to calculate

1- n√ residual value /cost

 


 1 Replies

CS/CMA/PROF./ADV. J.B. Sirvi (M.COM. CMA CS CA FINAL GDC&A. LLB)   (152 Points)
Replied 20 May 2016

It's simple

Example : cost rs. 10,000 residual value rs. 1000 life of asset 5 year (WDV Method)

Solution :

Formula 1-n√ residual value/cost

Step 1 :- 1-(5√1,000/10,000)x100

Step 2 :- calculator use as follows

1000÷10000=0.1

Use formula like this

a to power x here a=0.1 and x=5/2=2.5

Step for this calculation                        ans.

1-√0.1        12 time(calculator √ )  0.9994380034

2-     -1                                             -0.0005619966

3-    ×2.5                                         -0.0014049915

4-     +1                                             0.9985950085

5-     ×=       12 time                         0.0032

Step 3 ans 0.0032

WDV RATE 1-0.32%=0.68 or 68%

SORTCUT FORMULA ALSO ONLY FOR DEP.

USE Calculator Direct

This 5 year 4 time = and then √ (use as per sum)

1000÷10000×====√        get ans 0.0032 mean 1-0.32=0.68 or 68%


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