Understanding Double Declining Balance Depreciation

However, before computing the gain or loss, it is necessary to record the asset’s depreciation right up to the moment of the sale. To illustrate the cost of an double declining balance method asset, assume that a company paid $10,000 to purchase used equipment located 200 miles away. Finally, the company paid $5,000 to get the equipment in working condition. The company will record the equipment in its general ledger account Equipment at the cost of $17,000. These assets are often described as depreciable assets, fixed assets, plant assets, productive assets, tangible assets, capital assets, and constructed assets. How to…

• Date: Şubat 25, 2022
• Author: kerem ilkılıç
• Category: Bookkeeping

The steps to determine the annual depreciation expense under the double declining method are as follows. To get a better grasp of double declining balance, spend a little time experimenting with this double declining balance calculator. It’s a good way to see the formula in action—and understand what kind of impact double declining depreciation might have on your finances. But as time goes by, the fixed asset may experience problems due to wear and tear, which would result in repairs and maintenance costs. That’s why depreciation expense is lower in the later years because of the fixed asset’s decreased efficiency…

• Date: Şubat 25, 2022
• Author: kerem ilkılıç
• Category: Bookkeeping