Answered: What is depreciation, residual value…

Business

Accounting

What is depreciation, residual value and useful life? Describe at least 2 depreciation methods allowed under IFRS

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: Name and briefly explain four methods of depreciation.

A: Their are different types of Deprecation method to determine book value of the asset at the end of…

Q: In calculating depreciation, both the long-lived asset's cost and useful life are based on…

A: Depreciation is a crucial aspect of accounting that reflects the allocation of an asset's cost over…

Q: What are two major types of depreciation?

A: In general terms, depreciation is a decline in the value of long-term tangible assets. In…

Q: Explain the straight-line method of depreciation with an example?

Q: Estimates of an asset's salvage value and usable life are used to determine depreciation costs. Is…

A: Different methods of depreciation are based on the useful life of the asset. However, one of the…

Q: which method of depreciation is used when the cost of an asset is written off in equal amounts over…

A: Depreciation represents the reduction in the value of an asset over an expected life.

Q: What are the three depreciation methods ? Define each. Thank you !

A: Three methods of depreciation are as follow: Straight line method Double declining balance method…

Q: explain one method of depreciation

A: The depreciation expense is charged on fixed assets as reduction in the value of fixed assets with…

Q: Explain what is meant by depreciation. Describe the methods of depreciation and give a numerical for…

A: A tangible material's cost can be spread out over the period of its useful life using the accounting…

Q: Which of the following depreciation methods will result in the most depreciation expense over the…

A: Depreciation is method to allocate the cost of the Assets over its useful life

Q: Define Retirement and replacement depreciation methods.

A: Depreciation means decline in the estimation of benefit inside its valuable life because of mileage…

Q: There are three different life (recovery period) values associated with a depreciable asset.…

A: Depreciation: Depreciation refers to the reduction in the monetary value of a fixed asset due to its…

Q: Depreciation techniques applicable to the most prevalent categories of depreciable assets might be…

A: This question explains about the most prevalent categories of depreciable assets might be…

Q: A general description of the depreciation methods applicable to major classes of depreciable assets?

A: Depreciation is the allocation of cost of the asset over the useful life of the asset. Depreciation…

Q: Discuss the factors that influence the estimation of service life for a depreciable asset.

A: Fixed asset:It refers to the long-term assets having a useful life of more than a year which is,…

Q: What is the appropriate depreciation time for a new long-lived asset added to an existing one?…

A: Depreciation refers to the concept of evaluating the decrease in the value of an asset that occurs…

Q: Describe the diff erent depreciation methods for property, plant, and equipment and theeff ects of…

A: Depreciation: It is a concept that is used to measure the reduction in the usefulness of fixed…

Q: can you give me an example of straight line depreciation and explain it

A: The straight-line basis is a depreciation method of estimation of depreciation expense on an asset.…

Q: Please explain double-declining method depreciation. When is this the preferred method to figure…

A: The double-declining balance method is a method to calculate depreciation. Depreciation as per…

Q: Is residual value deductible when using accelerated method of depreciation>

A: The accelerated method of depreciation includes double declining balance method, 150% declining…

Q: Depreciation should be applied to a new long-lived item over what time period? Explain

A: This question explains about applied to a new long-lived item over what time period.

Q: The depreciable amount is also called the _________________. Select one alternative: carrying…

A: Depreciable amount is the cost of an asset minus its residual value.

Q: Briefly differentiate between the straight-line depreciation method and accelerated depreciation…

A: Depreciation: The depreciation is the expense which is debited to the income statement in the ratio…

Q: What are the three methods to account for depreciation? What are the differences between the three…

A: Methods of depreciation Straight line method Declining/ Diminishing balance method Sum-of-the-year…

Q: What are the pronouncements made by IFRS on Depreciation?

A: IFRS (International Financial Reporting Standards) provide guidelines on how to account for…

Q: w to determine what depreciation should be used

A: Solution Concept Depreciation Depreciation refers to the expense that is recorded…

Q: What are some recommendations to the pronouncements on depreciation?

A: Depreciation refers to the decrease in the value of a fixed asset over time due to wear and tear,…

Q: Define each of the following terms:d. Depreciation; amortization; EBITDA

A: The formula to compute EBITDA as follows:

Q: Define the following: (a) Depreciation (b) Book value

A: Asset refers to the resources kept by the businesses to be utilized in the operations. Assets are…

Q: When a number of low-cost depreciable assets with similar characteristics, service lives, and…

A: Group depreciation refers to that method of charging depreciation where the assets having similar…

Q: List 3 common intangible assets. How is the life determined that is to be used to compute…

A: Three common intangible assets are : 1. Goodwill: It is the premium amount that is valued based on…

Q: In what circumstances should the units-of-activity depreciation method be used?

A: INTRODUCTION: Fixed assets are long-term tangible assets utilized by businesses to generate profits.…

Question

What is depreciation, residual value and useful life? Describe at least 2 depreciation methods allowed under IFRS.

Definition Video Definition Accounting method wherein the cost of a tangible asset is spread over the asset's useful life. Depreciation usually denotes how much of the asset's value has been used up and is usually considered an operating expense. Depreciation occurs through normal wear and tear, obsolescence, accidents, etc. Video

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Section 179 Deduction and Modified Accelerated Cost Recovery System (MACRS) Depreciation

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

What do you understand by 'Depreciation'? How many methods of depreciation do we have? Explain your answer by using examples where necessary
Please can you provide some guidance on the deprciation calcuation?
When is accumulated depreciation reduced to zero? Explain and provide examples for each element (Asset & Liability)
Different methods are applied based on the type of asset and usage, or based on the different assumptions that are made, state any six (6) depreciation methods applicable in depreciating non-current assets.
In all cases, net property, plant and equipment (PP&E) should be calculated as the gross PP&E less the accumulated depreciation. Choices: True or False
What is the definition/meaning of Depreciation and Accumulated Depreciation in simple words? Please Explain and provide an example/scenario for both.
3) Which of the following best describes a depreciation base?7) The acquisition cost of an asset relative to its fair value O The estimated market value of an asset at the end of its useful life O The historical cost of an asset less the depreciation recognized to date O The amount that should be expensed over an asset's useful life
two different depreciation methods and prepare a chart showing the effects the depreciation method has on net income and total assets
Do your research on 5 depreciation methods. Identify the appropriate applications, advantages, and disadvantages of each method.
Describe Straight line method of depreciation.
What are the four components of information required in order to calculate depreciation?
Name depreciation methods that deduct residual value before an asset is depreciated.