Every company has its own policy on how to
record its fixed assets face value during the books of accounts closing. Most
of the accountants maintain the assets schedule in an excel worksheet showing
the allocation of depreciation value for its fixed asset items. But first the
following criteria, has to be considered in which the particular fixed assets
is being depreciated based on the useful life of the asset. Policy has to be defined as per the useful
life of the particular assets.
Particular asset could be estimated as in
workable condition for the next 5 years (i.e., Vehicle, Equipments etc.,) The
estimated useful life of the assets can also be re-assessed whether the useful
life of it can be extended for another year or so on.
Below is the basic way of calculating a
particular asset and depreciation schedule preparation:
Ex:
Assuming company ABC purchased a Motor Vehicle
on 15/1/17 at a value of 100,000.00 and has an estimated useful life for 5
years. The best method of calculating is accelerated depreciation method or
evenly over the useful life of the asset.
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Calculation Formula
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Jan (31 days)
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1,698.63
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(100000÷5yrs÷365Days)x31days
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Feb(28 days)
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1,534.25
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(100000÷5yrs÷365Days)x28days
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Mar (31 days)
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1,643.84
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(100000÷5yrs÷365Days)x31days
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Apr (30 days)
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1,698.63
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(100000÷5yrs÷365Days)x30days
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May (31 days)
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1,698.63
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(100000÷5yrs÷365Days)x31days
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June (30 days)
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1,643.84
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(100000÷5yrs÷365Days)x31days
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July (31 days)
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1,698.63
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(100000÷5yrs÷365Days)x31days
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Aug (31 days)
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1,698.63
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(100000÷5yrs÷365Days)x31days
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Sept (30 days)
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1,643.84
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(100000÷5yrs÷365Days)x31days
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Oct (31 days)
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1,698.63
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(100000÷5yrs÷365Days)x31days
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Nov (30 days)
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1,643.84
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(100000÷5yrs÷365Days)x31days
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Dec (31 days)
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1,698.63
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(100000÷5yrs÷365Days)x31days
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Accumulated Depreciation as on
31-Dec-2017
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20,000.00
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Acquisition Cost
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100,000.00
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Book Value as on December 31, 2017
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80,000.00
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