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Just a small qs which popped up while revising for my CFA
In the 2nd yr under the DDB method how do we calculate the dep exp?
And in the consolidation of a P and S,how much % of net income of sub is consolidated?Thanks in advance
Remind me – what’s the DDP method?
Meanwhile, you consolidate 100% of the subsidiary’s results SINCE ACQUISITION in the year of acquisition (so time apportion, but 100% of post acquisition figures)
If it’s not the first year, then 100% of the subsidiary’s profit or loss account
You need to check the F3 videos where John clearly illustrates the workings for the reducing balance method of depreciation
This DDP method is merely an alternative title for reducing balance method
Thats the issue.
I didnt want to watch the videos at this point
So can u pls just re iterate the formula for the 2 nd yr?Thanks again mr Mike for your support
1,000 asset depreciated at 40% reducing balance
1st year 40% x 1,000 = 400
Carrying value 600
2nd year 40% x 600 = 240
Carrying value 360
3rd year 40% x 360 = 144
Carrying value 216
And so on
In my example above, the standard rate for that type of asset would be 20% per annum
Multiply that rate by 2 = 40%
Apply that to the brought forward value
What’s the problem?
If you want me to calculate (another) second year depreciation expense using the double declining balance method, give me:
Cost and
Annual depreciation rateand I’ll work one for you
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