MGCR 211 Lecture Notes - Lecture 17: Intangible Asset, Asset Turnover, Canadian Intellectual Property Office

• School: McGill University
• Department: Management Core
• Course: MGCR 211
• Professor: Seda Oz

Document Summary

Also known as simply declining balance with cross-over. Under this method, asset is initially depreciated using declining balance method but after a certain point the depreciation method is switched from declining balance method to straight line method of depreciation computation. The certain point when depreciation method is changed or cross-over occurs is up to the management to determine. Although this method is not named under ifrs the use of methods other than those mentioned is not prohibited. Declining balance with cross over to straight line method is used in situations where assets initially render higher benefits but later becomes stable. Estimates trucks have a useful life of 250,000 miles. Mileage during year 1 and 2 is 60,000 and 90,000. Calculate depreciation expense for the first two years using units of production method. Depreciation per unit of output= (historical cost-residual value) / useful life, in units of production. Estimated useful life is 4 years and estimated residual value is.