Flo Choi

2007Depreciation is the systematic and rational allocation of tangible plus over the periods benefited by the utilisation of the asset (Smith et al 1998 . , as the coach-and-four of the caller-out must take into consideration various grammatic constituent in determining the periodic derogation focusing for asset acquisition or additions . The asset cost , residuary or salvage place , useful feel , and posture of use are some of the agents must considerThe useful life of a property is one of the important part outs to be br considered in determining the appropriate depreciation method for a current asset . Assets other than land have a restrict useful life because of certain physical factor much(prenominal) as wear and tear , and functional factors like obsolescence . In addition , the pattern of use of an asset must be considered since it matches the cost of an asset against revenues for a certain period . thither are various methods for allocating the cost of depreciable assets such as time-factor , use-factor , and composite-rate factor methodsBusinesses can formulate their own depreciation rule . s death for a change in depreciation rule at the end of the year is acceptable .

However , it is apparent that changed the tie-in s depreciation rule in to control the balance of their value margin to avoid the probable enlarge in the deposit rate of their borrowed fundThe passport of for a change in depreciation rule can increase the profit margin of the follo! w for the year . In view of the fact that the property go on behind have no depreciation charges for the month expenses would step-down which in turn pull up stakes increase profit margin . s recommendation is beneficial to the company since it allow for block the possibility of increase interest rate from the creditor further in turn will affect the fair foundation of the company s financial statementReferenceSmith , J . Skousen , F , Stice , E , Stice , J (1998 . Depreciation of non-current operating assets . liaise accounting (p . 486 . South WesternPAGEPAGE 3FLO CHOI foliate ...If you want to get a full essay, order it on our website: BestEssayCheap.com

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