Important Formula

Straight Line Method Depreciation. Actual cost of acquisition of an asset, after considering all the direct. All you need to do is determine the cost of the.

Also known as straight line depreciation, it is the simplest. With straight line depreciation, an asset's cost is depreciated the same amount for each accounting period. The straight line method (slm) is one of the easiest and most commonly used methods for providing depreciation.

Written Down Value Method Of Depreciation Formula. Here, s = salvage value at the end of useful life of asset. Thus, it is important to choose the method of charging depreciation wisely, in order to arrive at the correct value of gain or loss.let us understand how the straight line method of depreciation is different from the written down value method.

For example, if a plant costs rs. N = useful life of the assets ( schedule ii of companies act provides this useful life. Written down value method or reducing installment method does not suit the case of lease, whose value has to be reduced to zero.