1. Hoping that we are getting enough light on DEPRECIATION …

2. We have understood enough about ACCOUNTING FOR DEPRECIATION

3. And, now we go for some more INTERESTING thing about depreciation…

4. … provide for proportional amount of depreciation. What should be amount of depreciation on an asset acquired during the year?

5. Revising Depreciation Estimates

6. Revising Depreciation Estimates A machine purchased for Rs.130,000 was originally estimated to have a useful life of 30 years and a residual value of Rs.10,000. The asset has been depreciated for ten years using the straight- line method. Annual Depreciation = Rs.4,000 per year Rs.130,000 – Rs.10,000 30 years

7. Equipment 130,000 Accumulated Depreciation 4,000 4,000 4,000 4,000 4,000 4,000 4,000 4,000 4,000 4,000 40,000 Before revising Book value = Rs.90,000 Revising Depreciation Estimates

8. During the eleventh year, it is estimated that the remaining useful life is 25 years (rather than 20) and that the revised estimated residual value is Rs.5,000. Revising Depreciation Estimates Book value – revised residual value Revised estimated remaining life Rs.90,000 – Rs.5,000 25 years Rs.3,400 revised annual depreciation =

9. Changing the Method of Depreciation

12. Changing Depreciation Method A machine purchased for Rs.130,000 was originally estimated to have a useful life of 30 years and a residual value of Rs.10,000. The asset has been depreciated for ten years using the straight- line method. Annual Depreciation = Rs.4,000 per year Rs.130,000 – Rs.10,000 30 years

13. Equipment 130,000 Accumulated Depreciation 4,000 4,000 4,000 4,000 4,000 4,000 4,000 4,000 4,000 4,000 40,000 Before Change Book value = Rs.90,000 Changing Depreciation Method

15. Equipment 130,000 Accumulated Depreciation 10653 9780 8979 8243 7567 6947 6378 5855 5375 4935 74712 After Change Book value = Rs.55,288 Changing Depreciation Method

16. Extra Amount of Depreciation to be provided for due to change in Depreciation Method …………………….. Changing Depreciation Method Rs. 55,288 – Rs.40,000 Rs.15,288 = What will be the entry?

17. Instead of depreciating an asset, can I appreciate an asset ? Revaluation of Assets …?

21. PRESENTATION AND REPORTING ABOUT DEPRECIATION IN FINANCIAL STATEMENTS … As per Indian Accounting Standards – AS 6

24. Presentation in Balance Sheet… BALANCE SHEET AS AT … Application of Funds Gross Block Less: Depreciation Net Block xxxxx xxxxx xxxxx

26. Disclosures by Indian Companies in their Financial Statements……

29. Disclosure in Balance sheet

32. Disclosure in Balance sheet

33. COMPARATIVE ANALYSIS – AS, US GAAP, IAS/IFRS

37. Disclosures by Foreign Companies in their Financial Statements……

40. Disclosure in Balance sheet

41. Disclosure in Balance sheet

44. Disclosure in Balance sheet

45. With this, we come to an end of the TOPIC on depreciation .!!! The End

46. I hope that it has not depreciated your knowledge but in fact, has APPRECIATED the same!!!!

47. What NEXT…????