Hello,
How to compute the depreciation of fixed assets whose:
i) disposal proceeds is NIL (given out free)
ii) fixed assets have been written off (after reconciling them with physical count)
The depreciation policy used is: reducing balance method.
Kindly help.
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Depreciation of Fixed assets
5y ago#1With reducing balance depreciation, any disposal proceeds are irrelevant for calculating the depreciation. So it makes no difference if there are no proceeds (it only affects the profit or loss on the eventual sale).
Non-current assets (they have not been called fixed assets for many years now) is achieved by depreciating them or by treating them as having been disposed of for zero amount.
Have you watched the free lectures on non-current assets?
Thank you for your response.
But we want to clear off the assets in the books.
In order to clear it off, depreciation would be computed and netted off..
Or correct me if I'm wrong.
Yes, I'll check your lectures.
5y ago#3Yes - simply depreciate it down to zero.
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