Depreciation means the depreciable amount of an asset (cost/revalued amount less residual value) is allocated on a systematic basis over its useful life.
Depreciation = Depreciable amount / Useful life
Impairment means when an asset/s carrying amount is exceeds its recoverable amount, the amount over recoverable amount should be write off from carrying amount and present in Balance Sheet. This process is call as Impairment
An impairment (loss) is the amount by which the carrying amount (i.e. balance sheet value) of an asset or cash-generating unit exceeds its recoverable amount.
Impairment = Carrying value - Recoverable amount
If there is any indication that an asset may be impaired, the entity should estimate its recoverable amount. If the recoverable amount is less than the carrying amount, the carrying amount of the asset should be reduced to the recoverable amount.
Using accumulated depreciation and depreciation expense is a way that businesses can realize the true value of assets. A piece of equipment, for example, is devalued every year by the process of amortizing the asset. This in turn is recorded as depreciation and depreciation expense.
what the differences between impatient and patient people. and how can we compare their personal?
http://en.wikipedia.org/wiki/Depreciation#Straight-line_depreciation
the normal balance of accumulated depreciation is "credit"
Depreciation expense is neither an asset or liability. It is an expense.
Devaluation and depreciation are often interchangeable, although there is a subtle difference. Devaluation refers to changing the value of a currency in a fixed exchange rate, while depreciation is decreasing the value in a floating exchange rate.
impairment loss f an asset is the reduction in the income generating ability of that asset. it is calculated as: carrying value less recoverable amount. -carryibg value is the cost less accumulated depreciation -recoverable amount is the higher amount between the net selling price of an asset and its value in use.
Depreciation is for a particular year (say for Year 3). Accumulated depreciation is the aggregate of depreciation from the beginning (say from Year 1 to Year 3)
Depreciation policy is management thing that what depreciation method to use and how much depreciation to charge to each asset. Depreciation concepts are concepts which govern the depreciation process which management cannot change they are universal rules to follow depreciation that how straight line depreciation work etc.
In accounting, depreciation is an allocation of a previous expenditure, while in economics depreciation represents a decline in current value.
Book Value is the difference between the cost of an asset and the accumulated depreciation of that asset.
Depreciation expense is a nominal account which will goin to net income at the end of term. Accumulated depreciation is a contra account with capital assets which shows up in balance sheet.
Examples of operating expense ==> depreciation expense of a machine, impairment of goodwill Example of selling expense ==> advertising Example of general administrative expense ==> office expense
This will be found under "deferred taxes" on the income statement.
Penalties for being convicted of DWI vs. DUI differ because, in states that distinguish between the two, DUI is the least severe of the two. The severity between the two charges lies in the documented level of impairment of the driver.
Cost of depreciation assets and accumulated depreciation is same as accumulated depreciaton calculates how much depreciation is charged till date while remaining is current book value of assets.
When assets are recorded a company's balance sheet, they are valued at historical cost (what was paid for the asset), less any accumulated depreciation or amortization if applicable. This holds true even if the market value of the asset is considerably more than what the company paid for it. However, if the market value of a company's assets drops significantly below the asset's historical cost, then it sometimes becomes necessary to revalue the asset at the lower market value. This revaluation is called impairment. When it is appropriate to impair an asset depends on the type of asset in question. The difference between the current book value of the asset, and the value of the asset after impairment, is your impairment expense (cost).