Please enable JavaScript.
Coggle requires JavaScript to display documents.
Summary of the chapter - Coggle Diagram
Summary of the chapter
Type of expenditure
Capital expenditure
Money spent on buying non-current assets, making newly acquired fixed assets
Example: List price, wages for installation, legal fees, decoration expense, insurance fee etc
-
-
Depreciation methods
Straight-line method
-
Example: The Machinery cost about $10,000, and the scrap value is $2000. 2013: 10,000-2000 = 8,000
2014: $8000
2015:8000
Reducing method
Formula: Net book value( Cost- Accumulated Depreciation) x depreciation rate (%)
Example: Original cost ~ $10000
Depreciation rate: 20%
Year 1: $10000 x 20% = $2000
Year 2: ($10000-$2000) x 20% =$1600
Year 3: ($10000-$2000-$1600) x 20% =$1280
- Decreasing every year = Redusing balance method
Usage based method
Description: The depreciation of the NCA would be based the how long or how much it has used throughout the year.
Format: (Cost- scrap value) x output each year/ output over the whole useful life = Annual depreciation expense
-
-
-
-
-
-
-