Home For AAT student members AQ 2013 AAT Level 4 (Level 8 in Scotland)

Calculating Depreciation Methods

jewels.pjewels.p Font Of All KnowledgeRegistered Posts: 1,774
To calculate the percentage of reducing balance depreciation what is the simplest way to remember this. In my Osbourne Book it goes on about square roots and fourth roots but I have no idea having left school a long time ago. Is there a way to do this formula without using roots?

Thanks

Comments

  • PGMPGM Font Of All Knowledge Registered Posts: 1,954
    If Asset value was 100 in 08 and 90 in 09.

    Then depreciation was 10.

    10 over 100 is 10%.



    What information does a question give you?
  • jewels.pjewels.p Font Of All Knowledge Registered Posts: 1,774
    It says the formula is r = 1 - n (square root sign) s/c

    r = % rate of depreciation
    n = number of years
    s = residual value
    c = cost of asset

    No. of years depreciation = 4
    Residual Value = £4,000
    Cost of Asset = £20,000
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