Wdv

Originally posted by : gayathri
	hi, cost of an asset 10lakhs residual value 2.5 estimated life 10 years wt  is wdv rate? as per AS-6 pls explain with all steps

Rate of Depreciation = 1-(Scrap Value/Cost)^1/life [^ = to the power of]

= 1-(250000/1000000)^1/10

= 1-(0.25)^1/10
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Now, how to calculate (0.25)^1/10 in calculator
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1) Type 0.25
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2) Then press square root sign, 12 times
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3) Then press – sign and 1, i.e. -1
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4) Now press divide sign and life i.e /10
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5) Now press + sign and 1, i.e +1
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6) Now without pressing =, press X and then = sign
(repeat this X= process 12 times, X and = together constitute one time)
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In this calculation process, only life part if variable, rest of the steps are fixed.
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You will get (0.25)^1/10 as 0.871 (taken upto three decimal places)
= 1-(0.25)^1/10

= 1- 0.871 = 0.129*100 = 12.9 or 13% approx.

Hi,

Thank u so much