Calculating Depreciation Methods

jewels.p
jewels.p Registered Posts: 1,774 Beyond epic contributor 🧙‍♂️
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

  • PGM
    PGM Registered Posts: 1,954 Beyond epic contributor 🧙‍♂️
    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.p
    jewels.p Registered Posts: 1,774 Beyond epic contributor 🧙‍♂️
    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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