How to calculate WDV rates for depreciation based on useful life of the asset and scrap value at the end of the useful life?

Hi Tanseem

 Please find the answer in the attached file

Kind regards

 

 

The formula used to calculate WDV rates is –

Rate of Depreciation (R) = 1 – [s/c]1/n

Where,

s = scrap value at the end of period ‘n’;

c = Written down value at present; and

n = useful life of the assets

v.good question- i am agree with mr. ahmed opinion

Written Down value or the Reducing Balance method of depreciation : Written down value or the reducing balance method of depreciation is a method in which depreciation is calculated at a fixed percentage on the original cost in the first year. However in the subsequent years, depreciation is calculated at the same fixed percentage not on the original cost but on the written down values gradually reducing during the expected working life of the Asset due to charge of depreciation.

Written Down Value .this meat reducing balay -The depreciation is calculated at a certain fixed percentage each year on the decreasing book value

W.D.V. or carrying value of an asset can be computed by any one off the following methods:

Straight line method

Labour / machine productive working hours method (units of production).

Sum of years digit method

Double declining balance method 

While scrap value is lower of N.R.V. (market value) or book value (remaining cost at the end of useful life)

Wrtitten Down Value (WDV) = Value of Assets less Accumulated Depreciation. Rate of depreciation bepend on its useful life and scrap value.