Doctor Accounting : Chapter 10

Doctor Accounting : Chapter 10 in Collaboration with SAA Global Education

Do you know what Depreciation is?

Watch Dr Accounting chapter 10 to learn more about the world of Accounting with us!

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Video Transcript

Welcome to Doctor Accounting chapter ten.
In this series, I would like to share with you what is Depreciation.
A depreciation is a systematic allocation of expenses over useful life.
Depreciation is part of the FRS scheme. Depreciation is a non-cash item and it is an expenses that will appear on the debit side of the profit-loss account if you look in the T-form.
So depreciation there is a formula. The formula, let me demonstrate to you.
It is Cost minus by Residual Value over the Useful life.
So what is a Residual value? A Residual value is a scrap value.
Useful life is the Economic life of an asset.
So now, Depreciation there is two methods. One is the Straight-line method. Another one is the Reducing balance method.
I will share with you in my future series, about what is a Straight-line method and what is Reducing balance method.
So stay tuned! Thank you.