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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.
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Formula for depreciable cost?
Depreciable Value = Intial Cost - Residual Value
What is the difference between accumulated depreciation and an depreciable asset?
Depreciable asset - accumulated depraecation = net of Depreciable asset (PPE) Which is the reported PPE(net)
What are the terms depreciable value salvage value and estimated life mean?
Depreciable Value: It is the value of asset up to which any asset can be depreciated. Salvage Value: It is the value which a company can get on sale of fully depreciated asset. Estimated useful Life: It is that life of an assets which a company determine at the time of purchase for which an asset can be utilized in business to generate revenue.
What economic events prompting increase in the life of depreciable assets?
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Are additions to net working capital depreciable?
no.
How is the net book value of a depreciable asset calculated?
The net book value of a depreciable asset is calculated by deducting the accumulated depreciation from the original cost of the asset. Accumulated depreciation is the total depreciation expense recorded over the life of the asset. This calculation allows for the determination of the asset's value at a specific point in time.
If plant equipment is attached to leased property must the depreciable life of the equipment coincide with lease terms?
If the equipment was attached in such a manner that it could not be removed, you would depreciate it over the term of the lease or shorter.
What has the average life span increased by since 1900?
The average life span has increased by about 30 years since 1900 due to advances in medicine, public health measures, and improved living conditions. This has led to a significant increase in life expectancy globally.
The cost of a depreciable asset less accumulated depreciation reflects the book value of the asset?
true
How soap increased life spans?
No
Is an intangible asset depreciable?
Yes. Any capital asset (both tangible and intangible) whose value expires over more than one accounting period is depreciable. For example, a patent that expires after 7 years must be depreciated at the end of each year.
What transactions would be considered an investing activity on a Statement of Cash Flows?
selling a depreciable asset for cash at a loss
