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Difference between Fixed method Depreciation and Written Down Value Method?

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Question ajoutée par Shekhar Koli , Deputy Manager (Accounts) , Shapoorji Pallonji & Co. Pvt. Ltd
Date de publication: 2017/10/17
Muhammad Haris CIMA
par Muhammad Haris CIMA , Accountant , Majalat

Fixed method of depreciation is based on Fix rate on Asset amount. say if asset value is $100,000 and depreciation is @ 10% then this depreciation expenses is $10000

with fixed method Depreciation value (10,000)  will not change.same depreciation is charge for coming years

 

Reducing Balance Method/Written Down Value Method is calculated on asset balance each year. say if asset value is $100,000 and depreciation is @ 10% then  depreciation expenses is $10000 for 1st year but in 2nd year depreciation is based on Asset value $100,000-10,000=90,000*10%=9,000

with written down value method  depreciation is calculated on asset balance every year

JOYANTA MITRA
par JOYANTA MITRA , SR.AUDITOR , R.ISLAM & CO.C.A. FIRM

in case of fixed method the rate of depreciation is fixed in the value of assets.but in case of written down  method  the value of depreciation  rate has been decided on the reducing value .

Shekhar Koli
par Shekhar Koli , Deputy Manager (Accounts) , Shapoorji Pallonji & Co. Pvt. Ltd

In Fixed Method Depreciation assets value become NIL and in Written down Value Method Assets Value never becom Zero. 

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