Block1 2 depreciation carrefour
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The document discusses the concept of depreciation in accounting. Depreciation refers to allocating the cost of a tangible asset over its useful life. As time passes, assets wear out and lose value. The document provides an example to illustrate how depreciation is recorded. It describes a computer that was purchased for €1,000 and has a useful life of 5 years. Under the straight-line depreciation method, the computer's value would be reduced by €200 each year over 5 years, until it reaches a value of €0 at the end of its useful life. This process of allocating an asset's cost over its years of use through depreciation expense is an important accounting concept.
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For Upcoming Meetups Join Mysore Meetup Group - https://meetups.mulesoft.com/mysore/
YouTube:- youtube.com/@mulesoftmysore
Mysore WhatsApp group:- https://chat.whatsapp.com/EhqtHtCC75vCAX7gaO842N
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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