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Is Depreciation of lease to own equipment calculated based on useful life or lease terms?
no
What else can I help you with?
Is depreciation expense an estimate that is based on predictions of the asset's salvage value and useful life?
True
When can Depreciable life be increased?
Initially, depreciation for financial reporting purposes is based on an owner's estimate of the useful life of the asset in service. If later, the owner has better or additional information about the true useful life of the asset, he can revise his estimate of its useful life and take all remaining depreciation (on a going-forward basis) based on the asset's revised remaining useful life.
What are the types of depreciation methods?
In financial accounting there are three types of depreciation methods:Straight-line = (cost-residual value)/useful life. This method is used when the asset generates revenues that are equal (or very close to equal) over its useful life.Diminishing balance = (cost-accumulated depreciation)*depreciation rate. This method is used when the asset's revenues decrease over its useful life.Units of production = (cost-residual value)*units used /total life units. This method is used when an asset generates revenues based on its measurable usage.
Historical cost based depreciation tends to do what when there is inflation?
HIstorical cost based depreciation tends to increase profits when there is inflation
What are the principles of MACRS is based?
MACRS (Modified Accelerated Cost Recovery System) is based on the principle of assigning a shorter recovery period to assets that are typically used at a higher rate in the early years of their useful life. It also takes into account the time value of money by allowing greater depreciation deductions in the earlier years of an asset's life. MACRS uses specific depreciation tables and formulas provided by the IRS to determine the depreciation expense for different types of assets over their useful life.
What is MT and MSL in accounting depreciation method?
MT and MSL are two depreciation methods used in accounting. They are based on the linear method of depreciation.
Which method of depreciation would you use if you were to receive a bonus which is based on net profit?
which method of depreciation to use when bonus is received that is based on net profit
Which type of depreciation is not based on passage of time?
External depreciation is not based on the passage of time. A property depreciates due to external forces that can not be controlled by the owner.
How can one determine the salvage value of a car for depreciation purposes?
The salvage value of a car for depreciation purposes can be determined by estimating the amount the car is expected to be worth at the end of its useful life. This can be based on factors such as the car's age, condition, market demand, and resale value. It is important to consider these factors when calculating depreciation for financial reporting or tax purposes.
What is the difference between tax depreciation and book depreciation?
Tax depreciation is the one done based on Tax rules, for example certain asset purchased from sep 2010 to nov 2010 is eligible for 100% depreciation.] Book depreciation is the one based on corporate law . Vehicles depreciated for seven years. The net book value is the one represented in financial statements. Tax man will adjust profits based on tax depreciation rules and revise tax accordingly.
What is non recoverable depreciation?
It is the depreciation amount that is not covered by the policy. Polices that are based on ACV (Actual Value), rather than RC (Replacement Cost) do not cover value lost due to depreciation.
Sum of the year depreciation?
In sum of year digit depreciation method depreciation is charged based on total number of years fixed assets is usable in business instead of using any percentage or fixed amount of depreciation.
