COMMERCE 1AA3 Lecture Notes - Lecture 25: Book Value, Ddb Worldwide

• School: McMaster University
• Department: Commerce
• Course: COMMERCE 1AA3
• Professor: Emad Mohammad

Document Summary

For a 5-year ul assets, the year digits are 5,4,3,2,1. Annual depreciation expense = (cost - salvage value)x n / syd. Annual depreciation expense = (cost - sv( * output/ total output. If the asset is not used, the depreciation expense is 0. Ddb and syd start with the highest depreciation and lower over time they will all give you the same depreciation over time. Straight line gives you higher income, therefore giving you higher taxes. Refers to the change in the assumption about the asset"s useful life and salvage value. Affects current and future years, not prior years. Doesn"t matter when in the year they change the estimate, assume that it is at the beginning of the year. On january 1, 2001 abc purchased a truck for ,000 with an estimated useful life of 6 years and salvage value of ,000.