n Mar. 31, 2020 ABC had acquired 10 laptops of the same model. Each unit was bought at P30,000. Due to the expected use and update trends, ABC opted to the double-declining method to depreciate the assets over a period of 5 years. As of this date, the unit salvage value is P5,000. On Jan. 1, 2022, the entity observed that it became more appropriate to use the straight-line method starting the current year. What should the depreciation expense be for the year ended Dec. 31, 2022?
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.
On Mar. 31, 2020 ABC had acquired 10 laptops of the same model. Each unit was bought at P30,000. Due to the expected use and update trends, ABC opted to the double-declining method to
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