【文章內(nèi)容簡介】 0 0$ 40% 5 , 7 6 0$ 1 5 , 3 6 0$ 8 , 6 4 0$ 2022 8 , 6 4 0$ 40% 3 , 4 5 6$ 1 8 , 8 1 6$ 5 , 1 8 4$ 2022 5 , 1 8 4$ 40% 2 , 0 7 4$ 2 0 , 8 9 0$ 3 , 1 1 0$ 2022 110$ 2 1 , 0 0 0$ 3 , 0 0 0$ T o t a l D e p r e c i a t i o n 2 1 , 0 0 0$ P l u g y e a r 5?The McGrawHill Companies, Inc., 1999 Slide 929 Irwin/McGrawHill DoubleDeclining Balance Example Y e a r C o m p u t a t i o nD e p r . E x p e n s eA c c u m u l a t e d D e p r e c i a t i o nB o o k V a l u e1998 2 4 , 0 0 0$ 40% 9 , 6 0 0$ 9 , 6 0 0$ 1 4 , 4 0 0$ 1999 1 4 , 4 0 0$ 40% 5 , 7 6 0$ 1 5 , 3 6 0$ 8 , 6 4 0$ 2022 8 , 6 4 0$ 40% 3 , 4 5 6$ 1 8 , 8 1 6$ 5 , 1 8 4$ 2022 5 , 1 8 4$ 40% 2 , 0 7 4$ 2 0 , 8 9 0$ 3 , 1 1 0$ 2022 110$ 2 1 , 0 0 0$ 3 , 0 0 0$ T o t a l D e p r e c i a t i o n 2 1 , 0 0 0$ P l u g y e a r 5Total depreciation over the estimated useful life of an asset is the same using either the straightline method or the decliningbalance method. ?The McGrawHill Companies, Inc., 1999 Slide 930 Irwin/McGrawHill DoubleDeclining Balance Graph of Depreciation Expense 9600576034562074110$0$ 1 ,0 0 0$ 2 ,0 0 0$ 3 ,0 0 0$ 4 ,0 0 0$ 5 ,0 0 0$ 6 ,0 0 0$ 7 ,0 0 0$ 8 ,0 0 0$ 9 ,0 0 0$ 1 0 ,0 0 01997 1998 1999 2022 2022 2022Fo r th e y e a r e nd e d De c e m be r 3 1Depreciation?The McGrawHill Companies, Inc., 1999 Slide 931 Irwin/McGrawHill Depreciation Methods in Use for Financial Reporting A sur v ey of 60 0 P ub l i cly O w ned Co r po r at i on s563441170539S tra i ght l i neDe c l i ni ngba l a nc eS um of t he y e a r s 39。di gi tsA c c e l e r a te d m e thods (not s pe c i fie d)Uni ts of out putO the r?The McGrawHill Companies, Inc., 1999 Slide 932 Irwin/McGrawHill MACRS: The Tax Method MACRS = Modified Accelerated Cost Recovery System Based on DecliningBalance Methods The only accelerated method allowed by the IRS when puting depreciation for tax return purposes. Asset Cost ? MACRS rate Rates are available from tables provided by the IRS. ?The McGrawHill Companies, Inc., 1999 Slide 933 Irwin/McGrawHill Other Issues ?Estimates of Useful Life and Residual Value ? May differ from pany to pany. ? The reasonableness of management抯 estimates is evaluated by external auditors. ?Principle of Consistency ? Companies should avoid switching depreciation methods from period to period. ?The McGrawHill Companies, Inc., 1999 Slide 934 Irwin/McGrawHill Revising Depreciation Rates So depreciation is an estimate. Predicted salvage value Predicted useful life Over the life of an asset, new information may e to light that indicates the original estimates need to be revised. ?The McGrawHill Companies, Inc., 1999 Slide 935 Irwin/McGrawHill On January 1, 1998, equipment was purchased that cost $30,000, has a useful life of 10 years and no salvage value. During 2022, the useful life was revised to 8 years total (5 years remaining). Calculate depreciation expense for the year ended December 31, 2022, using the straightline method. Revising Depreciation Rates Example ?The McGrawHill Companies, Inc., 1999 Slide 936 Irwin/McGrawHill Revising Depreciation Rates Example Book value at date of change Salvage value at date of change Remaining useful life at date of change When our estimates change, depreciation is: ?The McGrawHill Companies, Inc., 1999 Slide 937 Irwin/McGrawHill Revising Depreciation Rates Example A s s e t c o s t 3 0 , 0 0 0$ A c c u m u l a t e d d e p r e c i a t i o n , 1 2 / 3 1 / 2 0 0 0 ( $ 3 , 0 0 0 p e r y e a r ? 3 y e a r s ) 9 , 0 0 0 R e m a i n i n g b o o k v a l u e 2 1 , 0 0 0$ D i v i d e b y r e m a i n i n g l i f e ? 5R e v i s e d a n n u a l d e p r e c i a t i o n 4 , 2 0 0$ When our estimates change, depreciation is: Book value at date of change Salvage value at date of change Remaining useful life at date of change ?The McGrawHill Companies, Inc., 1999 Slide 938 Irwin/McGrawHill Impairment of Assets If the cost of an asset cannot be recovered through future use or sale, the asset should be written down to its realizable value. ?The McGrawHill Companies, Inc., 1999 Slide 939 Irwin/McGrawHill Time to move on to a new topic. ?The McGrawHill Companies, Inc., 1999 Slide 940 Irwin/McGrawHill Update depreciation to the date of disposal. Recording cash received (debit) or paid (credit). Removing accumulated depreciation (debit). Journalize disposal by: Removing the asset cost (credit). Recording a gain (credit) or loss (debit). Disposal of Plant and Equipment ?The McGrawHill Companies, Inc., 1999 Slide 941 Irwin/McGrawHill If Cash BV, record a gain (credit). If Cash BV, record a loss (debit). If Cash = BV, no gain or loss. Disposal of Plant and Equipment Recording cash received (debit) or paid (credit). Removing accumulated depreciation (debit). Removing the asset cost (credit). Recording a gain (credit) or loss (debit). ?The McGrawHill Companies, Inc., 19