u Fixed Percentage Method

Fixed percentage method can be used to calculate depreciation for a given period, or to calculate the depreciation rate.

FP1 = PV

I%

 

YR1

 

 

 

 

 

 

 

100

12

 

I%

FPj = (RDVj–1+ FV )

 

 

 

100

FPn+1 = RDVn

(YR1G12)

RDV1 = PV FV FP1

RDVj = RDVj–1FPj

RDVn+1 = 0 (YR1G12)

FP j : depreciation charge for the jth year

RDVj : remaining depreciable value at the end of jth year

I% : depreciation ratio

u Sum-of-the-Year’s Digits Method

The sum-of-the-year’s-digits method calculates depreciation for a given period.

Z = n (n +1)

 

 

 

 

 

 

 

 

2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

n' = n

YR1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

12

 

 

 

 

 

 

 

 

 

Z' =

(Intg (n' ) +1) (Intg (n' )+2 Frac(n' ))

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2

 

 

 

 

 

n

YR1

 

 

SYD1 =

 

 

 

 

 

 

 

 

 

(PV FV )

 

 

 

Z

12

 

 

 

 

SYDj = (

 

n'j+2

)(PV FV SYD1)

( jG1)

 

 

 

 

 

Z'

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SYDn+1 = (

n'– (n +1)+2

)(PV FV SYD1)

 

 

 

 

 

 

 

 

 

 

 

 

Z'

 

 

 

 

 

 

12–YR1

(YR1G12)

 

 

 

 

 

 

12

 

 

 

 

 

 

 

 

 

 

 

 

 

 

RDV1 = PV FV SYD1

RDVj = RDVj –1SYDj

SYD j : depreciation charge for the jth year

RDVj : remaining depreciable value at the end of jth year

E-70