Work out annual depreciation and a full year-by-year schedule for an asset. Choose the straight-line or reducing-balance method, and see the book value fall from cost to salvage.
| Year | Opening | Depreciation | Closing |
|---|---|---|---|
| 1 | 10,000 | 1,800 | 8,200 |
| 2 | 8,200 | 1,800 | 6,400 |
| 3 | 6,400 | 1,800 | 4,600 |
| 4 | 4,600 | 1,800 | 2,800 |
| 5 | 2,800 | 1,800 | 1,000 |
Depreciation spreads the cost of an asset over the years it is used. The two most common methods differ in how quickly the cost is charged.
An equal charge each year: cost minus salvage, divided by the useful life. Simple and steady, it suits assets that lose value evenly over time.
A constant rate on the falling book value, so the charge is larger in early years and tapers off. It suits assets that lose most value soon after purchase.
The method, rate, useful life, and residual value used in real books follow your policy and the standard you report under. Treat this as an example to sense-check a figure.
Depreciation method and rate depend on accounting policy. Check the treatment against the standards below.
This is an example schedule based on the inputs and the general formula. It is not accounting or tax advice. Confirm the method and figures against your accounting policy and the applicable standard.
Rivane tracks assets, schedules, and postings together, so depreciation is a report, not a spreadsheet.
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