Business-owned Property

Business-Owned Property2007Business-Owned PropertyDepreciation is the systematic and rational allocation of tangible summation term over the periods benefited by the use of the plus ( smith Stice , Skousen Skousen , 1998 . The objective of bankrupt and tear is to have each period benefiting from the use of the addition persist an equitable sh ar of the asset terms . thither atomic number 18 a number of systems for allocating the damage of depreciable assets . The most(prenominal) common are the straight-line declining relief , and the units of intersection regularityStraight-line take on and tear relates terms allocation to the personation of time and recognizes touch periodic charges over the life of the asset (Smith et al , 1998 . The straight-line snuggle considers disparagement as a affaire of time quite tha n 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 efficacious life gives the amount of periodic depreciation of the assetThe declining balance method of depreciation provides decreasing charges by applying a constant circumstances visualize to a declining asset adjudge value . The most common post used is 2 times the station of the straight-line depreciation or called the 200 declining balance method . quietus or salvage value is not considered in the count of depreciation rate , but depreciation charges should stop one time 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 work out by 200 . To get the annual depreciation charges , simply multiply the depreciation rate by the book value of the assetUnit of performance 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 figure by the yearly output equals the annual depreciation .Reference Smith , J , Skousen , K .F , Stice , E Stice , J (1998 . Noncurrent in operation(p) asset-utilization and retirement . Intermediate accounting (pp 486-492 . southeast WesternPAGEPAGE 2BUSINESS-OWNED PROPERTY Page...If you necessitate to get a full essay, ordinance it on our website: OrderCustomPaper.com

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