PDA

View Full Version : Depreciation meathod


AfzalHM
Jan 31, 2008, 11:35 AM
I just need an example of 200% declining balance meathod of depreciation

Thanks

MaggieMouse
Feb 2, 2008, 11:08 AM
A piece of equipment, cost $100, no salvage value, useful life 5 years.

for straight line method, each year depreciates $20, $20/$100=.2, then double it (your problem asked for 200%), 2*200%=.4, so 0.4 is the rate you use.

first year of double declining method: $100*.4=$40, second year: ($100-$40)*.4=$24

Here is the formular: depreciable base * (2 * 100% / useful life in years)