Accounts-depreciation

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maruthakuma

there are six methods of depreciation.
but most widely using methods are SLM and WDV methods.
SLM - straight line method
Depreciation equal to( Total cost of a Assest-scrap)/life of the Asset in years.
Example. Total cost of the Asset = 10000
scrap = 1000 ,life of the asset is 10 years
the depreciation 9000/10 = 900
WDV - Written down value method
first year Depreciation equal to Total cost of the asset*Depreciation rate as applicable as per schedule Xiv of companies act 1956.
second year depreciation = WDV of the asset * *Depreciation rate as applicable as per schedule Xiv of companies act 1956.
WDV= last year closing balance of asset after providing depreciation.
after second year also follow second year depreciation formula until WDV of the asset become ZERO.
3rd March 2010 From India , Madras

143 ram

DEPRECIATION –DIFFERENT METHODS
1. Straight Line Method
2. Diminishing Balance Method
3. Sinking Fund Method
4. Annuity Method
5. Sum of the digits Method
6. Machine Hour Rate method
7. Insurance Policy Method
8. Revaluation Method
9. Depletion Method
10. Replacement Method
23rd March 2010 From India , Hyderabad

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