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DEPRECIATION - Coggle Diagram
DEPRECIATION
reasons
old
age
wear and tear
obsolesces
usage
methods
methods
revaluation method
diminishing balance method OR reducing balance method
cost - previous year depreciation * %
suitable for computers
reason: technical improvements make computers rapidly out of date
straight line method
cost *%
cost / no. of years in use
cost-scrap value /no. of years in use
suitable for building
reason: asset depreciates evenly over its life
opening value + additional purchase - closing value
suitable for loose tools
Meaning: decrease in value of a fixed asset.