depreciation

1. Engr Muiz Abdur Raqib
Mechanical engineer

2. Depreciation

3. Depreciation Methods
1. Straight Line Depreciation
2. Sum of Years Depreciation
3. Double Declining Balance Method

4. 1. Straight Line
Depreciation
Where, B = Purchase price of asset
S = Salvage ( Resale) value of Asset
N = Service Life ( years)
dt = Depreciation of asset during year t
BVt = Book Value at the end of year t

5. Calculate depreciation charge dt and Book Value BVt from
year 1 to 5

7. 2. Sum of Years Digits Depreciation (SOYD)

8. Calculate depreciation charge dt and Book Value BVt from year 1 to 5
Depreciation charge dt for
t = 1, 2, 3, 4 and 5 is
Solution:

9. Following Table presents Book Value of asset for year 1, 2, 3, 4, 5
Using SOYD method

11. 3 Double Declining Balance (DDB) Method

12. Following Table presents Book Value of asset for year 1, 2, 3, 4, 5
Using Double Declining Balance Method