Download - Fixed assets and depreciation methods
![Page 1: Fixed assets and depreciation methods](https://reader036.vdocuments.site/reader036/viewer/2022081421/58a3076e1a28abea508b5f75/html5/thumbnails/1.jpg)
Depreciation Methods
Fixed Assets and
![Page 2: Fixed assets and depreciation methods](https://reader036.vdocuments.site/reader036/viewer/2022081421/58a3076e1a28abea508b5f75/html5/thumbnails/2.jpg)
Q: What Depreciation Method Does
Our Company / Client Use On Its
Assets ?
![Page 3: Fixed assets and depreciation methods](https://reader036.vdocuments.site/reader036/viewer/2022081421/58a3076e1a28abea508b5f75/html5/thumbnails/3.jpg)
Q: Why has your Company /
Client chosen that metod ?
![Page 4: Fixed assets and depreciation methods](https://reader036.vdocuments.site/reader036/viewer/2022081421/58a3076e1a28abea508b5f75/html5/thumbnails/4.jpg)
Q: What Are The Alternatives In
Our Country For Depreciation
Assets ?
![Page 5: Fixed assets and depreciation methods](https://reader036.vdocuments.site/reader036/viewer/2022081421/58a3076e1a28abea508b5f75/html5/thumbnails/5.jpg)
THEY ARE NOT HELD FOR SALE
Fixed Assets
Expected to Benefit Future Periods
Actively Used in Operations
Tangible in Nature
![Page 6: Fixed assets and depreciation methods](https://reader036.vdocuments.site/reader036/viewer/2022081421/58a3076e1a28abea508b5f75/html5/thumbnails/6.jpg)
Classifying Costs
Is the purchased item long-lived?
Yes
Is the asset used in a productive purpose?
No
Expense
Yes
Fixed Assets
No
Investment
![Page 7: Fixed assets and depreciation methods](https://reader036.vdocuments.site/reader036/viewer/2022081421/58a3076e1a28abea508b5f75/html5/thumbnails/7.jpg)
Decline in asset value over
its useful life
Fixed Assets
![Page 8: Fixed assets and depreciation methods](https://reader036.vdocuments.site/reader036/viewer/2022081421/58a3076e1a28abea508b5f75/html5/thumbnails/8.jpg)
Types of fixed assetsLandBuildingsMachinery and EquipmentCars, trucks, buses , etc ..Furniture
![Page 9: Fixed assets and depreciation methods](https://reader036.vdocuments.site/reader036/viewer/2022081421/58a3076e1a28abea508b5f75/html5/thumbnails/9.jpg)
Real estate commissions
Brokeragefees
Taxes
legal fees
Attorney fees
Land
The cost of land include many costs; the purchase price plus the following:
8-9
Land is not a depreciable Asset
Payments for surveying, cleaning
![Page 10: Fixed assets and depreciation methods](https://reader036.vdocuments.site/reader036/viewer/2022081421/58a3076e1a28abea508b5f75/html5/thumbnails/10.jpg)
Cost of purchase or construction
Brokeragefees
Taxes
Title fees
Attorney fees
BuildingsThe cost of buildings include many costs; the purchase price plus the following:
8-10
![Page 11: Fixed assets and depreciation methods](https://reader036.vdocuments.site/reader036/viewer/2022081421/58a3076e1a28abea508b5f75/html5/thumbnails/11.jpg)
Purchaseprice
Installing,assembling, and
testingInsurance while
in transit
Taxes
Transportationcharges
Machinery and Equipment
8-11
![Page 12: Fixed assets and depreciation methods](https://reader036.vdocuments.site/reader036/viewer/2022081421/58a3076e1a28abea508b5f75/html5/thumbnails/12.jpg)
Purchaseprice
Installing,assembling, and
testing
Insurance whilein transit
Taxes
Transportationcharges
Cars, trucks, buses , etc.
8-12
![Page 13: Fixed assets and depreciation methods](https://reader036.vdocuments.site/reader036/viewer/2022081421/58a3076e1a28abea508b5f75/html5/thumbnails/13.jpg)
Purchaseprice
Installing, andassembling
Insurance whilein transit
Taxes
Transportationcharges
Furniture
8-13
![Page 14: Fixed assets and depreciation methods](https://reader036.vdocuments.site/reader036/viewer/2022081421/58a3076e1a28abea508b5f75/html5/thumbnails/14.jpg)
Depreciation is the process of allocating the cost of a Fixed
asset to expense in the accounting periods benefiting
from its use .
CostAllocation
AcquisitionCost
(Unused)
Balance Sheet
(Used)
Income Statement
Expense
What is the Depreciation
![Page 15: Fixed assets and depreciation methods](https://reader036.vdocuments.site/reader036/viewer/2022081421/58a3076e1a28abea508b5f75/html5/thumbnails/15.jpg)
Depreciation Methods1. Straight Line.2. Declining Balance.3. Units Of Production.4. Hours Of Use.
![Page 16: Fixed assets and depreciation methods](https://reader036.vdocuments.site/reader036/viewer/2022081421/58a3076e1a28abea508b5f75/html5/thumbnails/16.jpg)
Q: What Depreciation Method Does
Our Company / Client Use On Its
Assets ?
![Page 17: Fixed assets and depreciation methods](https://reader036.vdocuments.site/reader036/viewer/2022081421/58a3076e1a28abea508b5f75/html5/thumbnails/17.jpg)
A: In Our Company /
Client We Use Straight Line Method On Its
Assets.
![Page 18: Fixed assets and depreciation methods](https://reader036.vdocuments.site/reader036/viewer/2022081421/58a3076e1a28abea508b5f75/html5/thumbnails/18.jpg)
Factors in Computing Depreciation
The calculation of depreciation requires three amounts for each asset:
1. Cost $50,0002. Salvage Value $5,0003. Useful Life 5
Years8-18
![Page 19: Fixed assets and depreciation methods](https://reader036.vdocuments.site/reader036/viewer/2022081421/58a3076e1a28abea508b5f75/html5/thumbnails/19.jpg)
Straight-Line MethodCost - Salvage Value
Useful life Depreciation
Expense for Period=
9,000$ DepreciationExpense per Year
= 50,000$ - 5,000$5 years =
De. Cr.Depreciation Expense 9,000
Accumulated Depreciation - Equipment 9,000 To record annual depreciation
![Page 20: Fixed assets and depreciation methods](https://reader036.vdocuments.site/reader036/viewer/2022081421/58a3076e1a28abea508b5f75/html5/thumbnails/20.jpg)
Q: Why has your Company /
Client chosen that metod ?
![Page 21: Fixed assets and depreciation methods](https://reader036.vdocuments.site/reader036/viewer/2022081421/58a3076e1a28abea508b5f75/html5/thumbnails/21.jpg)
A: Because our government forces
us to use one method, a
straight-line method.
![Page 22: Fixed assets and depreciation methods](https://reader036.vdocuments.site/reader036/viewer/2022081421/58a3076e1a28abea508b5f75/html5/thumbnails/22.jpg)
Q: What Are The Alternatives In
Our Country For Depreciation
Assets ?
![Page 23: Fixed assets and depreciation methods](https://reader036.vdocuments.site/reader036/viewer/2022081421/58a3076e1a28abea508b5f75/html5/thumbnails/23.jpg)
A: There are no alternative method for the Depreciation
of assets in our country.
![Page 24: Fixed assets and depreciation methods](https://reader036.vdocuments.site/reader036/viewer/2022081421/58a3076e1a28abea508b5f75/html5/thumbnails/24.jpg)
![Page 25: Fixed assets and depreciation methods](https://reader036.vdocuments.site/reader036/viewer/2022081421/58a3076e1a28abea508b5f75/html5/thumbnails/25.jpg)