Depreciation Question:
Explain revaluation method to calculate depreciation?
Answer:
Under this method the fixed assets are valued at the end of each accounting period. The difference between the value at the beginning of the period and the value at the end of the period represents the depreciation value which is charged against the profit and loss account. This method is used in case of assets like loose tools, packages, Farmers’ livestock etc.
Formula for Calculating:
Depreciation = Value of asset at the end – Value of asset at the beginning + Any new purchases
Formula for Calculating:
Depreciation = Value of asset at the end – Value of asset at the beginning + Any new purchases
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