This article throws light upon the top seven methods for charging depreciation on assets. The methods are: 1. Fixed Installment 2. Diminishing Balance Method 3. Annuity Method 4. Depreciation Fund Method 5. Insurance Policy Method 6. Revaluation Method 7. Depletion Method 8. Machine Hour Rate Method. Method # 1. Fixed Installment: This is the oldest and simplest method of charging [...]
In this article we will discuss about Assets:- 1. Definition of Assets 2. Characteristics of Assets 3. Objectives of Valuation 4. Types. Definition of Assets: Financial accounting has basic elements like assets, liabilities, owners' equity, revenue, expenses and net income (or net loss) which are related to the economic resources, economic obligations, residual interest and changes in them. Similarly, balance [...]
The following points highlight the top four valuation concepts of assets. The concepts are: 1. Historical Cost 2. Current Entry Price (Replacement Cost) 3. Current Exit Price (Net Realisable Value) 4. Present Value of Expected Cash Flows. Valuation Concept # 1. Historical Cost: Cost has been the most common valuation concept in the traditional accounting structure. Assets are generally recorded [...]