Accounting (AS)·Depreciation & disposal · NSSCAS 2.1.2
Calculating & recording depreciation
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Every delivery vehicle, machine and computer loses value as it works - and Accounting has a precise way to show it. In this lesson you learn to calculate depreciation by the straight-line and reducing balance methods (including assets bought part-way through the year), record it in the depreciation and provision for depreciation accounts, and present it in the income statement and the three-column statement of financial position. Depreciation appears in almost every Paper 1 final-accounts question, so these are marks you can bank.
What you'll learn in this lesson
By the end you should be able to (NSSCAS Accounting (AS) 2.1.2):
- calculate depreciation using the above methods taking into account non-current assets bought or disposed of during the year and or at year end
- record depreciation of non-current assets in the general ledger using the depreciation (expense) account and provision for depreciation account
- prepare an income statement to include depreciation of non-current assets
- prepare a statement of financial position
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