In this article we will discuss about the arguments for and against replacement cost basis of depreciation. Arguments for Replacement Cost Basis: Accountants who favour charging of depreciation on replacement cost basis give the following arguments: 1. In order to maintain the capital assets properly, it is desirable that depreciation should be charged on replacement cost basis otherwise real earned [...]
The following points highlight the top six methods of providing depreciation. The methods are: 1. Depreciation Based on Time Factor 2. Depreciation Based on Usage 3. Depreciation Based on Both Usage and Time Factors Joint Rate Method 4. Depreciation Based on Maintenance Factor 5. Considering the Revenue Earning Factor of the Asset 6. Revaluation Method. Methods of Providing Depreciation: Depreciation [...]
In this article we will discuss about the plant and machinery register. Concerns having a large number of machines usually maintain a Plant and Machinery Register. The maintenance of such a register facilitates the calculation of annual charge of depreciation in respect of each machine. Each machine and plant is allocated a separate folio wherein are recorded the particulars relating [...]