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en:asset [2022/07/04 10:37] triinp [5.1. Depreciation methods] |
en:asset [2022/07/04 10:37] triinp [5.1.2. Diminishing balance method] |
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- | ===5.1.1. Straight line method=== | + | === 6.1.1. Straight line method === |
Depreciation rate is calculated from purchase price by straight line method. | Depreciation rate is calculated from purchase price by straight line method. | ||
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Fixed asset with purchase price of 120,000 is depreciated at 20% per annum using the straight line method, depreciates permanently in 5 years (every year 24 000, every month 2000). | Fixed asset with purchase price of 120,000 is depreciated at 20% per annum using the straight line method, depreciates permanently in 5 years (every year 24 000, every month 2000). | ||
- | ===5.1.2. Diminishing balance method=== | + | === 6.1.2. Diminishing balance method === |
With diminishing balance method the fixed asset base value decreases each year by the depreciation amount. | With diminishing balance method the fixed asset base value decreases each year by the depreciation amount. |