Sum of The Year's Digits Depreciation Flashcards
1
Q
what is sum of the years’ digits depreciation
A
an accelerated variable cost depreciation method where the expense is higher in early years
2
Q
what is step 1
A
write down what you know
(e.g., residual value, asset cost, useful life etc.)
3
Q
what is step 2
A
build depreciation schedule
4
Q
how many columns does a sum of the years digits depreciation depreciation schedule have
A
6 columns
5
Q
what is the additional column for?
A
“depreciation rate (%)”
6
Q
what does SYD stand for
A
Sum of the year’s digits
7
Q
SYD Depreciation rate =
A
remaining useful life / sum of the years digits
8
Q
how do you calculate SYD
A
add all the years
(e.g., 5 years useful life - 5+4+3+2+1 = 15 SYD)
9
Q
A
