B2 Depreciation

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Rocio Lopez

Depreciation

Economy & Finance Technology

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…

Carrefour Future Leaders

The passing of time...
…also affects what things a company has…
Because things are used  they wear out...

1 YEAR!!!
Dec. 31, 2012

Jan. 01, 2012

Assets in use during 2012
Building
(warehouse and office
space)

STRAIGHTFORWARD, right? But...

How long will assets last?

Equipment

How is this event converted into EUR?
Furniture

How is this “wearing out” recorded in
accounting terms?

Deeds and incorporation
Carrefour Future Leaders

Let’s look at an example: A computer
Time passes... 5 YEARS
5 years
OUT
Computer

X

PN

ANC
AC

Year
2

3

4

All in year 1, nothing in
subsequent years

PNC

Its value after 5
years  €0

PC

1,200 €

1,200 €
1,000 €
800 €
600 €
400 €
200 €
0€
1

ANC
AC

PC

1,200 €
1,000 €
800 €
600 €
400 €
200 €
0€
Year

How does this happen?

PNC

You buy it on Jan.
01, 2012 for
€1,000

PN

Computer

1,000 €
800 €

600 €
400 €
200 €
0€
1

2

3

4

5

All in year 5, nothing in
previous years

5

Year

1

2

3

4

5

Spread throughout the 5
years at €240 each year

We would naturally… “spread it throughout the 5 years” so long as intensity of use is similar…
Time passes... 5 YEARS

OUT
Computer

NE

NCA

You buy it on
Jan. 01, 2012 for
€1,000

NCL
CA

CL

1,200 €
1,000 €
800 €
600 €
400 €
200 €
0€
Year

X

Computer

NE

NCA
NCL
1

2

3

4

5

CA

CL

All spread throughout the years
at €240 each year

In accounting, this is called
DEPRECIATION
Carrefour Future Leaders

Its value after 5
years  €0

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