MANAGEMENT

Detailed explanation-1: -Illustration 1 – Suppose a Plant is purchased for ₹ 10 lakhs and its estimated useful life is 10 years. The scrap value at the end of the useful life is estimated to be ₹ 2.5 lakhs. Calculate the WDV Rates. i.e. 1 – 0.250.1 = 12.95% (approx.)

Detailed explanation-2: -Depreciable Amount = Historical cost/ revalued value – Residual value as calculate in the above step 4. 7. If WDV method is used, need to find out rate of depreciation by using following formula and charge depreciation accordingly.

Detailed explanation-3: -In GAAP there is only one way to initially record a fixed asset and that is the cost method. The cost method involves recording the acquisition cost of the fixed asset, plus the costs of bringing the fixed asset to the condition and location required for its use.

Detailed explanation-4: -4. Sum-of-the-Years-Digits Depreciation Method. The sum-of-the-years-digits method is one of the accelerated depreciation methods. A higher expense is incurred in the early years and a lower expense in the latter years of the asset’s useful life.