This article throws light upon the top seven methods for charging depreciation on assets. The methods are: 1. Fixed Installment 2. Diminishing Balance Method 3. Annuity Method 4. Depreciation Fund Method 5. Insurance Policy Method 6. Revaluation Method 7. Depletion Method 8. Machine Hour Rate Method. Method # 1. Fixed Installment: This is the oldest and simplest method of charging [...]
In this article we will discuss about the combination of values approach. The combination of values approach has been suggested as a way of avoiding some of the disadvantages of the different current value valuation methods. The Canadian Accounting Research Committee (CARC) favours a combined use of current entry and current exit prices. More specifically, the following values are advocated [...]
In this article we will discuss about the advantages of historical cost. Firstly, historical cost principle automatically requires the recording of all actual transactions in the past. The market value of finished goods can be ascertained without knowing how the goods were actually produced. But there is no way to determine the historical cost of the goods without a record [...]