If we are given percentage of Straight line method depreciation per annum. And residual value also.
So will we first subtract residual value from cost and then find depreciation per annum? Or we will directly find the percentage to the entire cost.
For example we have 20% of depreciation per annum and residual value of 1000. Cost of NCA is 5000
(A) we will do like this: (5000-1000)x 20%
Or
(B) 5000x20%
I mean to say is that, like RBM it is already calculated residual value in percentage or we have to subtract residual value first.
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Depreciation
5y ago#1If it is straight line deprecation and it is given as a %, then the depreciation is that % of the cost (not the cost less the residual value).
I am still in confusion.
So we will not need to subtract residual value from cost and find depreciation from the cost by just
Depreciation % x Cost = Depreciation per annum?
5y ago#3Yes. That is what I wrote before :-)
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