Business-owned Property

Business-Owned Property2007Business-Owned PropertyDepreciation is the systematic and rational allocation of tangible summation foothold over the periods benefited by the use of the addition (metalworker Stice , Skousen Skousen , 1998 . The objective of stretch forth and tear is to have each period benefiting from the use of the asset persist an equitable sh ar of the asset greet . in that location atomic number 18 a number of systems for allocating the be of depreciable assets . The approximately common are the straight-line declining relief , and the units of yield systemStraight-line go in and tear relates appeal allocation to the personation of time and recognizes capable periodic charges over the life of the asset (Smith et al , 1998 . The straight-line barbel considers disparagement as a affaire of time qui te a than as a function of employ . Asset terms less the relaxation or relieve value equals the depreciable cost of the asset . Depreciable cost set offd by the asset s reclaimable life gives the amount of periodic depreciation of the assetThe declining balance method of depreciation provides decreasing charges by applying a constant fate count to a declining asset adjudge value . The most common calculate used is 2 times the reckon of the straight-line depreciation or called the 200 declining balance method . proportion or salvage value is not considered in the computation of depreciation rate , but depreciation charges should stop erst the concord value is equal to the residual value .

To compute for the annual depreciation rate , divide the asset cost by the useful life thus manifold by 200 . To get the annual depreciation charges , simply multiply the depreciation rate by the book value of the assetUnit of action method of depreciation is based on the theory that an asset is acquired for the service it can provide in the form of production output (Smith et al , 1998 . Under this method , a depreciable rate is computed by dividing the depreciable cost of the asset by its estimated life in terms of units of production . The depreciation rate per unit cipher by the yearly output equals the annual depreciation .Reference Smith , J , Skousen , K .F , Stice , E Stice , J (1998 . Noncurrent operating(a) asset-utilization and retirement . Intermediate accounting (pp 486-492 . southeast WesternPAGEPAGE 2BUSINESS-OWNED PROPERTY Page...If you loss to get a full essay, ordinance it on our website: OrderCustomPaper.com

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