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Kim Smith.
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Mainhingi
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Hod do i calculate depreciation using a sum of digits method
Kim Smith
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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
Kim SmithViewing 2 posts - 1 through 2 (of 2 total)
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