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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FA – FIA FFA › percentage AND straight line depreciation ?
Obligatory thank yous and I love yous for doing this. I am so broke and I cant afford classes.
So here is my question:
In the notes. Example 5 Chapter 7 it’s written 2% straight line depreciation, then the lecturer in the video finds out how many years useful life there is based on the last charge.
lets say we start with value of 100 and 10% dep. For first year is 10, second year 9, third year is 8.1 etc. Isnt that by definition not straight line ? Plus useful life from last value in year 15 ???
I really am trying to understand.
If it is 10% straight line depreciation then the depreciation is 10% of cost – i.e. $10 per year. Straight line depreciation is an equal amount each year.
If it is 10% reducing balance, then that it when the depreciation each year is 10% of the book value and therefore reduces each year.
Thank you
You are welcome 🙂