Presented by : REZANDYKA NOVIANDINI IIN SEPTIASARI AMINATUL KARIMAH

Understanding depreciation , assets, benefit age and residual values

reduction of depreciation or economic value of an asset

Current assets

Assets

Fixed assets

all the economic resources of company in the form of property or rights owned by the force of law

Assets

corporate asset that is used to help smooth the process of operational activities of the company For example, cash and other assets that are worth can be changed into cash by way of sale or used up in the normal operating cycle Current assets

asset that the company used its relatively permanent organizing role in the company's operations Fixed asset

To determine the amount of depreciation expense in each period , there are several methods that can be used , among other things : Straight-line method or methods of a fixed percentage of the purchase price . Method a fixed percentage of the book value or the declining balance method . Methods of production unit or units of production method . Services unit of work methods assets . Method the number of number of years .

A = Cost of acquisition of an asset is the amount

S = Estimated residual value of the asset

r = rate of depreciation or depreciation

n = useful life / economic life of the asset in

D = Load depreciation each period

a. Straight-line method (straight line method).

Straight-line method is also called fixed percentage method of the purchase price of the assets. Based on the magnitude of the straightline method of depreciation expense each year is still defined by the formula

The amount of the depreciation rate r is defined by the formula:

An asset with a cost of Rp5.000.000, 00. It is estimated that the assets can be utilized for 5 years with an estimated residual value Rp2.000.000, 00. Using the straight-line method, specify:

Answer

A = Rp5.000.000,00 S = Rp2.000.000,00 and n = 5 years

a.The amount of depreciation expense each year! b.Depreciation rates or depreciation percentage per year! c.Or the book value of assets at the end of the 3rd year! d.Make a list complete with accumulated depreciation!

An asset with a cost of Rp5.000.000, 00. It is estimated that the assets can be utilized for 6 years with an estimated residual value Rp2.000.000, 00. Using the straight-line method, specify:

Answer

b. Percentage of shrinkage (r)

a.The amount of depreciation expense each year! b.Depreciation rates or depreciation percentage per year! c.Or the book value of assets at the end of the 3rd year! d.Make a list complete with accumulated depreciation!

An asset with a cost of Rp5.000.000, 00. It is estimated that the assets can be utilized for 6 years with an estimated residual value Rp2.000.000, 00. Using the straight-line method, specify:

Answer c. Or the book value of assets at the end of the 3rd year eg S3, then: S3 = A 3D S3 = 5.000.000,00 3 x 600.000,00 S3 = Rp3.200.000,00 Thus, the price of assets at the end of 3th years is Rp3.200.000, 00

a.The amount of depreciation expense each year! b.Depreciation rates or depreciation percentage per year! c.Or the book value of assets at the end of the 3rd year! d.Make a list complete with accumulated depreciation!

An asset with a cost of Rp5.000.000, 00. It is estimated that the assets can be utilized for 6 years with an estimated residual value Rp2.000.000, 00. Using the straight-line method, specify:

Answer
d. List of asset depreciation by the straight-line method:
At year cost depreciat accumul Year-end ion ated book expense depreciat value ion

1st

5.000.000 ,00

600.000,0 0

600.000,0 0

4.400.000 ,00

a.The amount of depreciation expense each year! b.Depreciation rates or depreciation percentage per year! c.Or the book value of assets at the end of the 3rd year! d.Make a list complete with accumulated depreciation!

2nd

4.400.000 ,00 3.800.000 ,00 3.200.000 ,00 2.600.000 ,00

600.000,0 0 600.000,0 0 600.000,0 0 600.000,0 0

1.200.000 ,00 1.800.000 ,00 2.400.000 ,00 3.000.000 ,00

3.800.000 ,00 3.200.000 ,00 2.600.000 ,00 2.000.000 ,00

3th

4th

5th

In early 2005 PT Just and Prosperous buy an asset worth Rp15.000.000, 00. The assets shrunk 12.5% per year from the purchase price. Define: a.Value of assets at the beginning of 2010! b.Accumulated depreciation for 6 years! c.Age assets if the assets are not worth anymore!

Example

Answer A = Rp15.000.000,00 r = 12,5% = 0,125

a. From early 2005 until the beginning of 2010 = 5 years (n = 5) Or the book value of assets for n = 5, for example S5, then: S5 = A 5D S5 = A 5 x (r . A) S5 = 15.000.000,00 5 x (0,125 x 15.000.000,00) S5 = 15.000.000,00 9.375.000,00 = Rp5.625.000,00
Thus, asset prices in early 2010 were Rp5.625.000, 00. b. Total accumulated depreciation percentage r = n. r = 6 x 12.5% = 75% Total accumulated depreciation = r. A = 75% x Rp15.000.000, 00 = Rp11.250.000, 00 c. Age assets when S = 0, or r = 100%

Declining Balance Method

In this method the amount of depreciation expense each year is obtained from multiplying the depreciation rate (r) and the book value at the beginning of the year

in the n-th value of the assets acquired :

If expressed in%, then the rate of depreciation or depreciation percentage based on a fixed percentage of the book value or the declining balance method is:

Example
An asset with a cost of 20,000,000, 00. After operating for 6 years estimated residual value Rp5.000.000, 00. Using the method of a fixed percentage of the book value, determine : a. Rate of depreciation per year! b. book value at the end of the 4th year! c. Depreciation list!

 c. List according to the method of depreciation fixed percentage of the book value.

The amount of depreciation using Productive Output Method calculated based on unit of production (SHP) To calculate periodic depreciation expense, first is calculated depreciation for each unit of product, then the rate will be multiplied by the number of products produced in that period.

amount of the depreciation rate r per unit of production are :

the cumulative amount of depreciation expense at the end of year k is :

the book value at the end of year k is :

1. An asset with a acquisition cost Rp 25,000,000.00. Estimated useful lives of the assets for 6 years with a total production of 10,000 units and has a residual value Rp5.000.000, 00. If the amount of production each year in a row was 2,500 units, 2,250 units, 2,000 units, 1,750 units, 1,000 units, and 500 units. Determine : a. Depreciation rate per unit of production! b. Depreciation expense in year 3! c. The cumulative amount of depreciation expense at the end of the 4th year! d. The book value at the end of the 5th year! e. Arrangement depreciation list!

e. The composition of the depreciation list as follows :

2. A photo copy machine was purchased at a price of Rp 6,500,000.00. The machine is expected to have a depreciation rate 900 per 1000 pieces produced copy. a. If given year photo copy machine that can produce 565 500 copy of, what is the depreciation expense for the year? b. What is the price of the photocopy machine after the machine is producing 950,000 sheets of photo copy?

SERVICE HOURS METHOD & SUM OF THE YEARS DIGITS METHOD

Service Hours Method

Hours Method is calculated based on hours of work per unit of assets(aktiva). If an asset(aktiva) with a cost of A, period (time) benefits during the n years, produce as many hours of work Q (Q = q1 + q2 + q3 + . . .+ qn with q1 + q2 + q3 + . . . + qn are the number of consecutive hours assets from the first year up to year n) and residual values of S, so, the amount of the depreciation rate r each asset working hours are:

 If D1, D2, D3, . . . Dk is a first-year depreciation, ,

. . . , so, the cumulative amount of depreciation expense at the end of year are:... D= D1 + D2 + D3 + . . . + Dk D= r. q1 + r . q2 + r . q3 + . . . + r qk D= r(q1 + q2 + q3 + . . . + qk) Book value at end of year is: Sk = A D

example
An asset with a cost of 30,000,000, 00. Estimated useful lives

of the assets for 7 years with over 40,000 hours of engine operation and has a residual value Rp6.000.000, 00. If the number of hours worked each asset consecutive years is 10,000 hours, 8,500 hours, 6,000 hours, 5,500 hours, 5,000 hours, 3,000 hours and 2,000 hours. Define: a. Level of asset depreciation per hour of work! b. Depreciation expense in year ! c. The cumulative amount of depreciation expense at the end of the year! d. Book value at end of year ! e. Arrangement depreciation list!

Answer:
A = Rp30.000.000,00 n = 7 years Q = 40.000 hours (q1 = 10.000, q2 = 8.500, q3 = 6.000, q4 = 5.500, q5 = 5.000 and q6 = 3.000 and q6 = 2.000 ) S = Rp6.000.000,00

a.

; Rp 600,00

b. D4 = r . q4 = 600,00 x 5.500 = Rp 3.300.000,00 c. The cumulative amount of depreciation expense at the end of the 5th year: D = r(q1 + q2 + q3+ q4 + q5) D = 600,00 x (10.000 + 8.500 + 6.000 + 5.500 + 5.000) D = 600,00 x 35.000 D = Rp21.000.000,00 d. The cumulative amount of depreciation expense at the end of the 5th year : D = r(q1 + q2 + q3+ q4+ q5+ q6) D = 600,00 x (10.000 + 8.500 + 6.000 + 5.500 + 5.000 + 3.000) D = 600,00 x 38.000 D = Rp 22.800.000,00

Book value at the end of the year: Sk = A D

Sum of the years digits method

depreciation rate is a fraction r of the year-over-year decreases with fractional denominator is the sum of n natural numbers. The number of years of n years is: JBT= 1 + 2 + 3 + + n Depreciation expense was the end of each year is:

. . .

 The cumulative amount of depreciation expense at the

end of year is: D= D1 + D2 + D3 + . . . + Dk Book value at end of year is: Sk = A D

Example An asset with a cost of Rp5.000.000, 00 are estimated to have over the useful life of 6 years with a residual value of 800,000, 00 using the Sum of the years digits method:

a. Determine depreciation expense each year! b. Determine accumulated depreciation expense in the first of the 3th years! c. Determine the book value at the end of the 5th year!

Answer: A = 5.000.000,00 S = Rp 800.000,00 n = 6 years JBT = 6 + 5 + 4 + 3 + 2 + 1 = 21

= Rp 1.200.000,00

= Rp 1.000.000,00

. . .

= Rp 200.000,00

b. The cumulative amount of depreciation expense at the end of year is

c. The book value at the end of

year is

(5.000.000,00 800.000,00) x 4.200.000,00

S5 = 5.000.000,00 4.000.000,00 = Rp1.000.000,00