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Block1 2 depreciation carrefour
- 2. DEPRECIATION THANK YOU FOR YOUR INTEREST!!!! Yes, a year has gone by. Does this have any impact on the company that you might have overlooked and should now be recorded? Let’s have a better look at this issue…
- 3. DEPRECIATION Jan. 01, 2012 The passing of time... …also affects what things a company has… Because things are used they wear out... Dec. 31, 2012 1 YEAR!!! Building (warehouse and office space) Equipment Furniture Assets in use during 2012 Deeds and incorporation STRAIGHTFORWARD, right? But... How long will assets last? How is this event converted into EUR? How is this “wearing out” recorded in accounting terms?
- 4. DEPRECIATION You buy it on Jan. 01, 2012 for €1,000 Let’s look at an example: A computer Time passes... 5 YEARS OUT Its value after 5 years €0 ANC PN AC PNC PC Computer ANC PN AC PNC PC ComputerX 5 years How does this happen? 0 € 200 € 400 € 600 € 800 € 1,000 € 1,200 € All in year 1, nothing in subsequent years 0 € 200 € 400 € 600 € 800 € 1,000 € 1,200 € All in year 5, nothing in previous years Spread throughout the 5 years at €240 each year 0 € 200 € 400 € 600 € 800 € 1,000 € 1,200 € Year 1 2 3 4 5 Year 1 2 3 4 5 Year 1 2 3 4 5
- 5. DEPRECIATION You buy it on Jan. 01, 2012 for €1,000 We would naturally… “spread it throughout the 5 years” so long as intensity of use is similar… Time passes... 5 YEARS OUT Its value after 5 years €0 NCA NE CA NCL CL Computer NCA NE CA NCL CL ComputerX All spread throughout the years at €240 each year 0 € 200 € 400 € 600 € 800 € 1,000 € 1,200 € In accounting, this is called DEPRECIATION Year 1 2 3 4 5