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Post Info TOPIC: How to work out how a fixed asset has been depreciated
rachel_mclean


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How to work out how a fixed asset has been depreciated
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Hi

I don't know if I am being really thick....everyone else seems to work this out straight away.

This is the second time I have had to ask on the forum as I just don't get how it's worked out. So I'm totally stuck on what depreciation to charge for this year 13/14.

So I have these fixed assets b/f, their depreciation and the nbv at 31st March 2013. How on earth do you begin to work out what depreciation method has been used? I just can see it.

Each asset has been charged monthly on the last day of the month, I've just put the total dpn charge for the year (1st April 12 - 31st March 13)

1 - £1.46 a month from 30/09/12 to 31/03/13

2 - £3.37 a month from 30/09/12 to 31/03/13

3 - £2.08 a month from  30/09/12 to 31/03/13

4 - £11.34 a month from  31/10/12 to 31/03/13

 

  b/fDep'nNBV 12/13
31-Aug-12169.9910.2259.77
31-Aug-122161.923.59138.31
31-Aug-12399.9514.5685.39
01-Oct-124544.4868.04476.44
     
  876.32116.41759.91

Last time I asked a question like this someone worked it out straight away, is there a simple way to work it out or is it because she does it everyday and was quick to recognise it?

 

Thanks in advance for any help.



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Rachel
richard2013


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All of these seems to be depreciated on a 25% rate.

Item 1: 1.46 * 12 = 25% of 69.99
Item 2: 3.37 * 12 = 25% of 161.90
Item 3: 2.08 * 12 = 25% of 99.95
Item 4: 11.34 * 12 = 25% of 544.48

Well, not exactly 25%, but you get near it.

I just copied this from excel
bf rate AM 12M
69.99 25 7 12 10.206875
161.9 25 7 12 23.61041667
99.5 25 7 12 14.51041667
544.48 25 6 12 68.06

AM= actual months depreciated
eg 09,10,11,12,01,02,03
12M=you`ve got that many months last time I checked

So that helps perhaps.



-- Edited by richard2013 on Tuesday 6th of January 2015 08:42:41 PM

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Shamus


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Hi Rachel,

1) annualise the amount,

2) recalculate the NBV using a full years depreciation

3) Calculate the percentage.

So, lets go through them.

workings :

1) 10.22/7*12= 17.52
2) 23.59/7*12 = 40.44
3) 24.96/7*12 = 24.96
4) 68.04/6*12 = 136.08

Ok, now you have the annualised amounts (step (1))

Step 2, recalculate the NBV as it would have been given a full years depreciation

1) 69.99 - 17.52 = 52.47
2) 161.90 - 40.44 = 121.46
3) 99.95 - 24.06 = 74.99
4) 544.48 - 136.08 = 408.40

So now you have your theoretical full year NBV's.

Step 3 calculate the percentage (Current-prior/prior*100)

1) (52.47-69.99)/69.99*100*-1(to change the polarity) = 25.032%
2) (121.46-161.90)/161.90 * 100 * -1 = 24.978%
3) (74.99 - 99.95)/99.95 * 100 * -1 = 24.972%
4) (408.40 - 544.48)/544.48 * 100 * -1 = 24.993

Now looking at those percentages it seems obvious that there is a minor variance caused by the calculation of the weekly amount but what the bookkeeper was going for was an accross the board write off rate of 25%.

There are other ways of getting to that result but thats the way that I would calculate it

Hope that helps and makes sense,

kind regards,

Shaun.


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Shaun

Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Shamus


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lol,

Hi Richard,

same result, different routes.


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Shaun

Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
rachel_mclean


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Thanks so much Shaun, these calculations are BRILLIANT, I can use these everytime! thank you very much, this will save me hours of panicking!! and thank you Richard, I now have 2 ways to check (and double check)

Thanks again
Rachel

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Rachel
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