School of Business
Department of Accounting
Financial Accounting BACC200
Chapter 10 | Part 2
Plant Assets, Natural Resources and Intangibles
BACC200- Chapter 10
, DEPRECIATION METHODS
Depreciation is the process of distributing the cost of a plant asset over its useful life. All property, pl
equipment assets, except land, are depreciable.
Three Depreciation Methods: Three factors affect the computation of
depreciation:
Straight-line
Cost (original book value)
Units of Activity
Salvage Value (residual or scrap value)
Double Declining Balance
Useful Life (life expectancy)
Companies should apply consistency by using the same depreciation method throughout the usefu
the asset.
Department of Accounting
Financial Accounting BACC200
Chapter 10 | Part 2
Plant Assets, Natural Resources and Intangibles
BACC200- Chapter 10
, DEPRECIATION METHODS
Depreciation is the process of distributing the cost of a plant asset over its useful life. All property, pl
equipment assets, except land, are depreciable.
Three Depreciation Methods: Three factors affect the computation of
depreciation:
Straight-line
Cost (original book value)
Units of Activity
Salvage Value (residual or scrap value)
Double Declining Balance
Useful Life (life expectancy)
Companies should apply consistency by using the same depreciation method throughout the usefu
the asset.
