Module Code: ABZ2019AC101

Module Title: Fundamentals of Financial Accounting-PART I

Delivered By: Zhang Y., Vandermeer P., and Barbara M.

Session Number: Session-8, Friday, April 19, 2019

Design Tools to Depreciate a PPE Asset

Excluding land, a PPE (Property, Plant, and Equipment) asset is expected to have a limited life. Therefore, according to generally accepted accounting principles, the cost of a PPE asset is depreciated over the estimated useful life of the asset. There are many methods available to depreciate a PPE asset. Most of the widely used depreciation methods are either usage-based (e.g., units-of-production) or time-based (e.g., straight-line and double-declining balance method).The tools that are developed based on the widely used depreciation methods are listed below.

iSline Version 1.0

Given the initial cost of the asset, residual value of the asset, estimated useful life of the asset(years), and the year of purchase, iSline Version 1.0 determines the carrying amount of the asset at the end of each year.

LEARN/TEST

iSline Multi Version 1.0

iSline Multi Version 1.0 extends the functionality of iSline Version 1.0. The tool adds one more dimension to the plot. Given the initial cost of the asset, residual value of the asset, estimated useful life of the asset(years), and the year of purchase, iSline Multi Version 1.0 determines the carrying amount of the asset and the depreciation expense at the end of each year.

LEARN/TEST

iUnit Version 1.0

Given the initial cost of the asset, residual value of the asset, estimated total output, and the yearly output, iUnit Version 1.0 determines the carrying amount of the asset and the depreciation expense at the end of each year.

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iDDB Version 1.0

Double-declining balance method is an accelerated time-based depreciation method. This method contributes more depreciation at the early stages of the asset's useful life. Therefore, the depreciation using this method decreases over the useful life of the asset. Given the initial cost of the asset, residual value of the asset, estimated useful life of the asset (years), and the year of purchase, iDDB Version 1.0 determines the carrying amount of the asset at the end of each year.

LEARN/TEST

iImpair Version 1.0

Given the initial cost of the asset, residual value of the asset, estimated useful life of the asset (years), year of purchase,recoverable amount(USD), and the year of impairment, iImpair Version 1.0 determines the carrying amount of the asset and the depreciation expense at the end of each year.

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iAddition Version 1.0

Given the initial cost of the asset, residual value of the asset, estimated useful life of the asset (years), year of purchase of the asset,initial cost of the addition, residual value of the addition, estimated useful life of the addition (years), and the year of addition, iAddition Version 1.0 determines the accumulated depreciation amount of the asset at the end of each year.

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iReplace Version 1.0

Given the initial cost of the asset, residual value of the asset, estimated useful life of the asset (years), year of purchase, initial cost of the compartment to be disposed, residual value of the compartment to be disposed, estimated useful life of the compartment to be disposed(years), year of replacement, initial cost of the compartment to be added, residual value of the compartment to be added, estimated useful life of the compartment to be added(years), iReplace Version 1.0 determines the accumulated depreciation expense at the end of each year.

LEARN/TEST

You have reached the end of today's session.

Good luck! Hope you enjoy.