Nobody downloaded yet

Depreciation - Essay Example

Comments (0) Cite this document
Summary to essay on topic "Depreciation"
Generally different accounting policies for depreciation are adopted by different commercial enterprises in order to phase out the value of the depreciable assets over the period of the useful life of the various assets. It is also necessary that the policies adopted by the company for accounting the depreciation is disclosed in the financial statements so that the analysts and other readers of the statements can appreciate the views presented in such statements…
Download full paper
Read TextPreview

Extract of essay "Depreciation"

Download file "Depreciation" to see previous pages... The management of a business usually selects an appropriate method of depreciation depending on the kinds of assets employed in the business, the nature and purposes for which the assets are put to use in the business and the general conditions prevailing in the business environment. Sometimes the business may use a combination of one or more methods of charging depreciation.
Let us write or edit the essay on your topic "Depreciation" with a personal 20% discount.. Try it now
With this background, this paper analyses the calculation and accounting of depreciation for various kinds of assets in the light of the statement that "Accountants generally prefer to show fixed assets on the balance sheets of limited companies at their original cost, less an estimated amount of depreciation."
"The assets of a business arephysical resources owned and used by the business and arelisted on the balance sheet to reflect the value." The assets are classified into two major classifications: current assts and non-current assets. Current assets are those which can be or expected to be converted into cash within a short trading cycle usually a year or so. The current assets are usually short term assets and are meant to be for the short term use of the business. Examples of current assets are cash, inventory and receivables. The non-current assets representing fixed assets that are of long term or more permanent in nature employed in the business. The non-current assets include assets like land, buildings, plant and machinery, equipments and vehicles. The non-current assets have some characteristic features that are common to this class of assets.
The purpose of acquiring these assets is to use in the business as against converting into cash on a business venture.
Except for the investments in land, the cost of other non-current assets is gradually written off over the period of useful life. This amount that is being written off is being treated as an expense for doing the business and is reflected as depreciation in the profit and loss statement of the business. The depreciation is a periodic charge over the respective assets.
The dollar value of non-current assets is shown on the balance sheet as the original cost of the item at the time of purchase (the net asset value is calculated by deducting the accumulated depreciation from the marginal cost)(Business Victoria)
3.0 Definition of Depreciation:

A precise definition of depreciation may take the following form:
"Depreciation is a measure of the wearing out, consumption or other loss of value of a depreciable asset arising from use, effluxion of time or obsolescence through technology and market changes. Depreciation is allocated so as to charge a fair proportion of the depreciable amount in each accounting period during the expected useful life of the asset. Depreciation includes amortisation of assets whose useful life is predetermined.
Depreciable assets are assets which
(i) are expected to be used during more than one accounting period; and
(ii) have a limited useful life; and
(iii) are held by an enterprise for use ...Download file "Depreciation" to see next pagesRead More
Cite this document "Depreciation"
  • APA
  • MLA
(“Depreciation Essay Example | Topics and Well Written Essays - 2500 words”, n.d.)
Depreciation Essay Example | Topics and Well Written Essays - 2500 words. Retrieved from https://studentshare.org/miscellaneous/1522579-depreciation
(Depreciation Essay Example | Topics and Well Written Essays - 2500 Words)
Depreciation Essay Example | Topics and Well Written Essays - 2500 Words. https://studentshare.org/miscellaneous/1522579-depreciation.
“Depreciation Essay Example | Topics and Well Written Essays - 2500 Words”, n.d. https://studentshare.org/miscellaneous/1522579-depreciation.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document
DB6,DQ1 Selling Receivables , and DQ2 Use of Depreciation
The information from Wall Street which states that accounting receivables are being sold in corporate America in record numbers makes a lot of sense. The reason why corporations are selling more receivables than ever before is correlated with the current economic situation the business world is experiencing.
1 Pages(250 words)Essay
Responses to DQ1Selling ReceivableDW and DQ2 Use of Depreciation CH
The company that buys the receivables does so in order to gain a profit. Companies that buy receivables have to be careful as far as not overpaying for the receivables due to the fact that some of the receivables purchased will go into default. A way to determine the risks associated with the receivables purchased is to perform an account receivables aging schedule.
1 Pages(250 words)Essay
The straight line depreciation method and sunk costs
The partial building would be considered a sunk cost because the cost incurred cannot be recovered by the contractor. Three costs that are included in the net cash flow for initial investment are initial investment outlay, expected future net operating cash flows, and non operating cash flows.
2 Pages(500 words)Essay
Methods of Auditing Construction Equipment Depreciation
The consumption of fixed assets over time and their diminishing value are referred to as depreciation. This paper will evaluate different substantive procedures necessary to be carried out in examining the mobile construction equipment and related depreciation.
4 Pages(1000 words)Essay
Analyze whether a dollar depreciation will improve the U.S. current account deficit
While the current account surplus increases a country's net foreign assets, a current account deficit does the reverse. It is evident from the above definitions that huge amounts of current account deficit may not be good for the economic growth. Current account deficits occurs when a country’s imports exceeds the exports.
4 Pages(1000 words)Essay
Depreciation Schedule
The depreciation procedures are based on United States Generally Accepted Accounting Principles (Tie, 2005). The above excel computation shows that depreciation expense for year 1 is $300. Under the straight line method, the annual depreciation is fixed at $300 per year.
2 Pages(500 words)Research Paper
Currency Depreciation
economy and international transactions has been impacted. Many economists and analysts are off the opinion that a depreciated dollar would make it cheaper for other countries to buy U.S. goods. Also, U.S. consumers would find it expensive to buy foreign goods, as the U.S.
2 Pages(500 words)Essay
Depreciation Aspects in Accounting
There are a number of factors to be considered when applying depreciation values to the new server. The most important factors include the usage, units of useful utilities obtained from the
2 Pages(500 words)Essay
Capital Expenditure and Depreciation
Some costs which are included in the capital expenditure are the following: delivery of the fixed asset, improvement of fixed asset, legal costs of purchasing property and installation of fixed assets (Porter, 2011). Capex is shown in the balance sheet. It is very important to categorize this expenditure without any mistake in the accounting system because miscalculations will lead to the asset and liability mismatch (Albrecht, 2011).
6 Pages(1500 words)Essay
Mortgage and Depreciation Expense and Tax Analysis
Obviously, this means that when mortgage rates are down, investors tend to lower prices for the house (Lank, 2003). In this regard, real estate investors would have to take a longer time to pay for the mortgage, and this means that they mortgage the house at a hire rate.
3 Pages(750 words)Essay
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Let us find you another Essay on topic Depreciation for FREE!
logo footer
Contact us:
Contact Us Now
FREE Mobile Apps:
  • StudentShare App Store
  • StudentShare Google play
  • About StudentShare
  • Testimonials
  • FAQ
  • Blog
  • Free Essays
  • New Essays
  • Essays
  • Miscellaneous
  • The Newest Essay Topics
  • Index samples by all dates
Join us:
Contact Us