Why we depreciate non-current assets, the straight-line and reducing-balance methods, and disposals.
Depreciation spreads the cost of a non-current asset over its useful life (matching concept). It is a non-cash expense in the income statement; accumulated depreciation reduces the asset's carrying value in the balance sheet.
Methods
- Straight-line: equal amount each year.
- Reducing-balance: a fixed % of the carrying value each year (more in early years).
Viewing only
This content is free to read on superexams.com and cannot be printed or downloaded.
Read the full note — free
Create a free account to read this note in full. Every free account gets 2 complete revision notes — no card needed.