,Module 4 -
Asset Management
Depreciation it's an expense and it's an indication of the usage of an
expense
it's an imputed expense (not paid physically
· never uses cents !
and buildings don't ger depreciated can
only increase value
-
·
land
~ does not involve outflow of cash
>
-
can't depreciate to less than R1
,
00 +
asset is old .
2
types :
I 2
fixed Installment Method / Balance Method
straight Line
Diminishing
% %
CPX ICP-Acc Dep) x
0
.
↓
carrying value
* if it's for specific amount of months - X is
BalanceSheet
Accumulated Depreciation on Vehicles/Equipment
Depreciation
Nominal
Depreciation
Acc .
Depreciation (Profit and Loss)
>
-
close off all nominal accounts off to
profit and loss .
Asset Disposal ,
function is to evaluate whether or not it's worth keeping it by bringing all the
vehicle entries together .
~
assists in double entries to write off the asset to create a loss/ profit on asset
-ruited
&
calculation : not
(
L
cost price
↑
(A D New
C
+
Accumulated Depreciation Old +
-
.
C
value
carrying
Selling Price
-
~
Profit I Loss on Sale of Asset ·
lower than S P
.
=
loss
/
profit
·
higher man sp =
vin
, Steps :
t Vehicle -
·
Remove asset cost price
Balance 50 800 10
Asser Disposal 008
2
calculate depreciation current
year cold + new
~
diminished / cost
-
Acc .
Dep .
on Vehicles t 3 Remove accumulated depreciation +
send
Asser Disposal Depreciation 500 this year's depreciation -> to
(4000 + 500) Asser Disposal
4
How was it sold ?
↳ Debtors control (bought on credits
Depreciation h BankI
bought for cash)
V 500
b creditors Control (traded in)
Acc .
Dep on
↳
.
.
Drawings
lowner took it
5
profit or loss ?
Asset Disposal
Vehicles 10 000 ACC ,
Dep .
on .
V 4508
Profit on Sule 500 Bank 6008 loss will appear here
of asser
*
-
10588 10 508
-
in
profit and
1
loss
note 3
&
&
:
↳ cost-cost additions
of
disposal +
↳
Gasposal
A D-A D disposal +
depreciation
b
. .
of
!
Ku~
at
carrying value
Bank
6000
Asser Disposal
cost >
- total -
assert additions
D - Old (without Asser)1 - new Asser (this year)
A D
+ . Old A D .
+ D -
Total Dep of Asser
Asset Management
Depreciation it's an expense and it's an indication of the usage of an
expense
it's an imputed expense (not paid physically
· never uses cents !
and buildings don't ger depreciated can
only increase value
-
·
land
~ does not involve outflow of cash
>
-
can't depreciate to less than R1
,
00 +
asset is old .
2
types :
I 2
fixed Installment Method / Balance Method
straight Line
Diminishing
% %
CPX ICP-Acc Dep) x
0
.
↓
carrying value
* if it's for specific amount of months - X is
BalanceSheet
Accumulated Depreciation on Vehicles/Equipment
Depreciation
Nominal
Depreciation
Acc .
Depreciation (Profit and Loss)
>
-
close off all nominal accounts off to
profit and loss .
Asset Disposal ,
function is to evaluate whether or not it's worth keeping it by bringing all the
vehicle entries together .
~
assists in double entries to write off the asset to create a loss/ profit on asset
-ruited
&
calculation : not
(
L
cost price
↑
(A D New
C
+
Accumulated Depreciation Old +
-
.
C
value
carrying
Selling Price
-
~
Profit I Loss on Sale of Asset ·
lower than S P
.
=
loss
/
profit
·
higher man sp =
vin
, Steps :
t Vehicle -
·
Remove asset cost price
Balance 50 800 10
Asser Disposal 008
2
calculate depreciation current
year cold + new
~
diminished / cost
-
Acc .
Dep .
on Vehicles t 3 Remove accumulated depreciation +
send
Asser Disposal Depreciation 500 this year's depreciation -> to
(4000 + 500) Asser Disposal
4
How was it sold ?
↳ Debtors control (bought on credits
Depreciation h BankI
bought for cash)
V 500
b creditors Control (traded in)
Acc .
Dep on
↳
.
.
Drawings
lowner took it
5
profit or loss ?
Asset Disposal
Vehicles 10 000 ACC ,
Dep .
on .
V 4508
Profit on Sule 500 Bank 6008 loss will appear here
of asser
*
-
10588 10 508
-
in
profit and
1
loss
note 3
&
&
:
↳ cost-cost additions
of
disposal +
↳
Gasposal
A D-A D disposal +
depreciation
b
. .
of
!
Ku~
at
carrying value
Bank
6000
Asser Disposal
cost >
- total -
assert additions
D - Old (without Asser)1 - new Asser (this year)
A D
+ . Old A D .
+ D -
Total Dep of Asser
