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Hello sir,
In Chapter 3 of bpp study text-pg 44-while calculating depreciation under reducing balance method, scrap value is not deducted.Is the treatment correct? To my understanding the scrap is to be deducted while calculating depreciation under this method.Please help.
If you want to ask the tutor something directly you should use the ask the tutor forum.This forum is primarily designed for student to help one another.I am not a tutor.With reducing balance method scrap value usually would not be considered when using this method as it is usually based on general figures for categories of assets depending on rate of economic consumption of assets with categories such as computers having high rates and buildings having low rates.
No, scrap value is not deducted while calculating depreciation via reducing balance method, it’s in the year of disposal that you subtract the scrap value to see if there is a balancing charge/allowance.
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