session 15 - fixed assets

Question 1

Using the straight-line method, what is the depreciation charge per year?

Answer 1

Depreciation charge = (Historical cost - Salvage or Residual value) / Estimated Life

Question 2

What is the formula for net book value (NBV)?

Answer 2

NBV = Historical cost - Accumulated Depreciation

Question 3

What is the formula for impairment loss?

Answer 3

Impairment Loss = Net book value - fair market value

Question 4

What is the formula for depreciable value/cost to be allocated?

Answer 4

Depreciable value = Historical cost - Expected salvage value

Question 5

What is the formula for a gain/loss on an asset

Answer 5

Gain/Loss = Proceeds - NBV