Depreciation Formula
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depreciation formula
Transcript of Depreciation Formula
dk depreciation rate
dk* cumulative depreciation
k-# of years
BVkbook value
SVsalvage value
i% reduction of value
RConstant percentage
STRAIGHT LINE METHOD (SLM)dk= depreciation rate per year (constant value)dk*=(k)(dk) accumulated depreciationBVk=B- dk*book value
SINKING FUND METHOD (SFM)dk=(B-SV)[]sinking fund factor (constant value)dk*=dk[]accumulated depreciationBVk=B-dkbook value
DECLINING BALANCE METHOD (DBM)d1=(B)(R)depreciation for the first yeardk=B(1-R)k-1(R)depreciationdk*=B[1-(1-R)k] accumulated depreciation BVk=B(1-R)kbook value