Business-owned Property

Business-Owned Property2007Business-Owned PropertyDepreciation is the systematic and rational allocation of tangible summation approach over the periods benefited by the use of the plus ( smith Stice , Skousen Skousen , 1998 . The objective of hold up off and tear is to have each period benefiting from the use of the addition persist an equitable sh ar of the asset represent . at that place atomic number 18 a number of systems for allocating the make up of depreciable assets . The most(prenominal) common are the straight-line declining relief , and the units of work mannerStraight-line wear and tear relates cost allocation to the personation of time and recognizes touch periodic charges over the life of the asset (Smith et al , 1998 . The straight-line arise considers disparagement as a affaire of time quite th an as a function of employ . Asset cost less the relaxation or relieve value equals the depreciable cost of the asset . Depreciable cost set offd by the asset s useful life gives the amount of periodic depreciation of the assetThe declining balance method of depreciation provides decreasing charges by applying a constant region account to a declining asset adjudge value . The most common say used is 2 times the localize of the straight-line depreciation or called the 200 declining balance method . rest period or salvage value is not considered in the reckoning 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 reproduce by 200 . To get the annual depreciation charges , simply multiply the depreciation rate by the book value of the assetUnit of payoff 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 cypher by the yearly output equals the annual depreciation .Reference Smith , J , Skousen , K .F , Stice , E Stice , J (1998 . Noncurrent direct asset-utilization and retirement . Intermediate accounting (pp 486-492 . southeast WesternPAGEPAGE 2BUSINESS-OWNED PROPERTY Page...If you want to get a full essay, ordinance it on our website: Or derCustomPaper.com

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