Hi ,
Can any one help me in depreciation rate calculation ...if rate is not provided in the question using WDV method? here in the solution they have given a formula: 1- nth square root of RSV/historical cost. plz explain me if any one knows how to solve this formula by using calculator.
Regards,
Nalini
Dear Nalini,
Please note:::
WDV= 1-(scrap value/cost)1/life
Always assume 5% of the cost as scrap value if missing( Sec. 350 of the Co.s Act)
Example:
1-(5000/1000000)^1/5years
steps to calculate dep rate
press underroot of .05 (12 times)
then
- 0.00073111 i.e. ( -1 + 0.99926888)
divide by life i.e. 5 years in this case
= - 0.000146222
then
+1= 0.999853777
then press multiply and equal to 12 times
It will come =0.54936
Dep rate would be 1-0.54936= 45.06 %
thanks
CAclubindia
