Imagine you have purchased an equipment today for P price. After N years of service you put it on Kijiji to be taken for free. Based on this scenario, which depreciation model shows 100% depreciation in the first year of the service life of this equipment? Double Declining Balance SOYD Declining Balance 150% Declining Balance
Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
Imagine you have purchased an equipment today for P price. After N years of service you put it on Kijiji to be taken for free. Based
on this scenario, which
Double Declining Balance
SOYD
Declining Balance
150% Declining Balance
None of the given answer
Step by step
Solved in 2 steps
