Deprication

There are only 2 methods.

1) Straight line over a set number of years. There is sometimes a residual or scrap value to take into account. In that case the amount to be depreciated is the loss in value divided by the number of years. In simulations you are normally just told something like, office equipment is depreciated by 20% on cost each year.

2) Reducing balance is calculated on the net book value. So at the end of each year, you deduct the total accumulated depreciation to date from the cost to arrive at net book value, and then apply the depreciation percentage to that.

Not sure if there's an easier way to remember it. If you remember that for straight line the percentage is applied to cost, and for reducing balance the percentage is applied to net book value, it should make sense. Hope that helps.

Blonde wrote: »

Hi

Thank you for replying to my last email in connection with Deprication,

I am about to sit Unit 5 & Unit 15 assessments, any advice would be appreciated, nothing seems to be sticking in my head at the moment.

Thought as a study aid, i would look back through everything covered from Sept 10, but this does not seem to be helping either,

Which books would you recommend, and where are you in your studies?

Thank you once again

going over the past papers is the best revision in my opinion!