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Depreciation

Forums › ACCA Forums › ACCA AA Audit and Assurance Forums › Depreciation

  • This topic has 1 reply, 2 voices, and was last updated 4 years ago by Kim Smith.
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  • February 11, 2022 at 4:19 pm #648491
    Mainhingi
    Member
    • Topics: 1
    • Replies: 0
    • ☆

    Hod do i calculate depreciation using a sum of digits method

    February 11, 2022 at 5:32 pm #648497
    Kim Smith
    Keymaster
    • Topics: 138
    • Replies: 8443
    • ☆☆☆☆☆

    Welcome to the OT forums!

    It is not examinable in AA (because it is not examinable in FA) but here’s an example if you are interested:

    Asset useful life is 4 years, the sum of the digits is 1+ 2 + 3 + 4 = 10. Depreciation in year 1 is 40%, 30% in year 2, 20% in year 3 and 10% in the last year. It’s like a reducing balance method, though reducing balance just gets smaller and smaller; is not nil after a specified number of years.

    For a tutor response to your queries – please use my tutor forum https://opentuition.com/forum/ask-acca-tutor-forums/ask-the-tutor-acca-audit-and-assurance-aa-exams

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