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# TOPIC: QuestionNeed clarification on Depreciation Methods

## Need clarification on Depreciation Methods 8 years 2 months ago #1043

 Bala R Topic Author Offline Fresh Boarder Posts: 7 Thank you received: 0 I have a question on Depreciation Calculation Methods? For all the methods Straight Line, Double declining and sum of digits the depreciation expense is calculated by multiplying the depreciation rate into the book value. While considering the book value do we need to consider the scrap value for every year? For example whenever we are considering the book value do we need to consider the book value as (BOOK VALUE-Scrap Value)? I believe this question makes more value in double declining because in other methods we use book value in the formula whereas in the double declining we are using “Book Value at the beginning of every year” in the formula so I need to know do we need to subtract the scrap every year in the double declining from the latest book value/book value at the beginning of the year. Can anyone please clarify? Thanks in advance. Your e-mail address will never be displayed on the site. Check this box to be notified of replies to this topic. Note: BBcode and smileys are still usable.

## Re:Need clarification on Depreciation Methods 8 years 2 months ago #1065

 Simon Leung Offline Fresh Boarder Posts: 1 Thank you received: 0 When calculating the depreciation value, always think of "book value" = BOOK VALUE - SCRAP VALUE. The logic is: by the end the asset's finite life, its value will be depreciated to an ending scrap value - no matter that is a zero or any given amount. Your e-mail address will never be displayed on the site. Check this box to be notified of replies to this topic. Note: BBcode and smileys are still usable.

## Re:Need clarification on Depreciation Methods 8 years 2 months ago #1071

 Cornelius Fichtner Away Administrator PrepCast Instructor Posts: 1133 Karma: 36 Thank you received: 187 Balasubramanian, Begin your calculation by first subtracting the scrap value from the original asset cost. Once only. Now use the remaining number to figure out the depreciation. Example: Asset cost: 100 Scrap value: 20 Calculate 100 - 20 = 80 and this is the starting figure for your depreciation. Your e-mail address will never be displayed on the site. Check this box to be notified of replies to this topic. Note: BBcode and smileys are still usable. Until Next Time, Cornelius Fichtner, PMP, CSM President, OSP International LLC

## Re:Need clarification on Depreciation Methods 8 years 2 months ago #1078

• Bala R
• Topic Author
• Offline
• Fresh Boarder
• Posts: 7
Thanks everyone for providing the answers. I did some home work this week end and I have come up with a spread sheet which contains the formulas and examples for depreciation calculations. When you get a chance please have a look and post your thoughts.

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