The document discusses four methods for calculating depreciation: straight line, MACRS, double declining balance, and sum of the years' digits. It provides examples to illustrate how to use each method. The straight line method evenly depreciates the asset cost minus its salvage value over its useful life. MACRS uses accelerated percentages in early years. Double declining balance applies higher depreciation rates in early years that decline each year. Sum of the years' digits allocates depreciation based on the digits of the useful life years summed together.

2. 
Presented By:
Sunny Khatana
Computer Science Engg.
University Of Gujrat

3. 
 A reduction in the value of an asset with the passage
of time, due in particular to wear and tear.
Defination

4. Here The Four Methods are described:
 Straight Line Method
 MACR’S Method
 Double Decline Method
 Sum Of The Year Method
Methods

5. 
Cost of Asset=10,500
Salvage Value/Residual Value=500
Life years=5
Straight Line Method

6. 
10,000 cost - 500 salvage value/5 = 2000 per year
year cost Depreciation Accumulated Book
Expense Depreciation Value
 1 10,500 2,000 2,000 8,500
 2 10,500 2,000 4,000 6,500
 3 10,500 2,000 6,000 4,500
 4 10,500 2,000 8,000 2,500
 5 10,500 2,000 10,000 0

7. 
cost =2,50,000
year cost Depreciation Accumulated Book
Expense Dep value
 1 250000*35% 87,500 87,500 162500
 2 250000*15% 37500 12500 125000
 3 250000*20% 50000 175000 75000
 4 250000*15% 37500 212500 37500
 5 250000*15% 37500 250000 0
MACR’S(Modified Accelerated cost Recovery System)

8. 
Here
Year= 6
n=6
n(n+1)/2= 6(6+1)/2= 42/2 =21
Cost= 2,50,000
Also
6+5+4+3+2+1=21
Sum Of the Year By Digit
Method

9. Cost Depreciation Accumulated Book
Dep value
250000*6/21 71428.57 71428.57 178571.43
250000*5/21 59523.80 130952.37 119047.63
250000*4/21 47619.04 178571.41 71428.59
250000*3/21 35714.28 214285.69 3571.31
250000*2/21 23809.52 238095.21 11904.76
250000*1/21 11904.76 2,50,000 0

10. 
Cost of asset = $100,000
Estimated residual value = $10,000
Estimated useful life of asset = 5 years
Depreciation rate = (1/useful life) x 200%
= 1/5 x 200% = 20% x 2 = 40%
Double Declining Balance
Method

11. 
Cost Depreciation Accumulated Book
Dep value
100000*40% 40000 40000 60000
60,000*40% 24000 64000 36000
36000*40% 14400 78400 21600
21600*40% 8640 87040 12960
12960*40% 2960(*) 90000 10000
(*)
Depreciation stops when book value=Residual value