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    Koushik Chakraborty
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    This document outlines four formulas for calculating depreciation of assets: 1) The fixed installment or straight line method calculates equal annual depreciation amounts by dividing the cost minus residual value by the estimated life. 2) The diminishing balance method calculates decreasing annual depreciation amounts by applying a depreciation rate to the book value each year. 3) The annuity method treats depreciation as an annuity with interest by calculating the present value of a series of payments. 4) Depletion calculates the rate of depreciation for wasting assets by dividing the total quantity by the rate of use.

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    This document outlines four formulas for calculating depreciation of assets: 1) The fixed installment or straight line method calculates equal annual depreciation amounts by dividing the cost minus residual value by the estimated life. 2) The diminishing balance method calculates decreasing annual depreciation amounts by applying a depreciation rate to the book value each year. 3) The annuity method treats depreciation as an annuity with interest by calculating the present value of a series of payments. 4) Depletion calculates the rate of depreciation for wasting assets by dividing the total quantity by the rate of use.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOC, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as doc, pdf, or txt
    23 views1 page

    Formulas

    Uploaded by

    Koushik Chakraborty
    This document outlines four formulas for calculating depreciation of assets: 1) The fixed installment or straight line method calculates equal annual depreciation amounts by dividing the cost minus residual value by the estimated life. 2) The diminishing balance method calculates decreasing annual depreciation amounts by applying a depreciation rate to the book value each year. 3) The annuity method treats depreciation as an annuity with interest by calculating the present value of a series of payments. 4) Depletion calculates the rate of depreciation for wasting assets by dividing the total quantity by the rate of use.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOC, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as doc, pdf, or txt
    of 1

    Formulas

    1. Fixed installment method / Straight line method :Cost estimated residual value Estimated life. Annual depreciation value For % Annual depreciation cost of assets

    100

    2. Diminishing method :-

    R.v.= p
    P= principal R = rate per cent N= no of years

    1-

    n R.v.
    Cs ot

    N= Life of the assets.

    3. Annuity method :N= no of years

    1 (1+interest) n -1 interest

    4. Depletion :Case of assets Total community Rate of depreciation =

    Prepared By Koushik Chakraborty. Accounting formulas.

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