The World Bank

The World Bank is a global organization providing funding to developing countries, aiming to reduce poverty through low-interest loans and addressing global issues. Founded after World War II, the Bank collaborates with partners to combat poverty and conducts research on market indicators. Operating since 1946, it works to enhance economic development worldwide. With 189 member nations represented on its Board of Governors, the Bank's policies are drafted annually during board meetings. The criteria for membership include joining the IMF, and executive directors oversee the Bank's operations.

• World Bank
• global organization
• developing countries
• poverty reduction
• economic development

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Uploaded on Apr 13, 2025 | 0 Views

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Presentation Transcript

1. 11 Depreciation LEARNING OBJECTIVES 1. Explain the concept of depreciation. 2. Identify the factors involved in the depreciation process. 3. Compare activity, straight-line, and diminishing-charge methods of depreciation. 11-1

2. DEPRECIATIONCOST ALLOCATION Methods of Depreciation The profession requires the method employed be systematic and rational. Methods used include: 1. Activity method (units of use or production). 2. Straight-line method. 3. Diminishing (accelerated)-charge methods: a) Sum-of-the-years -digits. b) Declining-balance method. LO 3 11-2

3. Methods of Depreciation Activity Method ILLUSTRATION 11-2 Data Used to Illustrate Depreciation Methods Data for Stanley Coal Mines Illustration: If Stanley uses the crane for 4,000 hours the first year, the depreciation charge is: ILLUSTRATION 11-3 Depreciation Calculation, Activity Method Crane Example LO 3 11-3

4. Methods of Depreciation Straight-Line Method ILLUSTRATION 11-2 Data Used to Illustrate Depreciation Methods Data for Stanley Coal Mines Illustration: Stanley computes depreciation as follows: ILLUSTRATION 11-4 Depreciation Calculation, Straight-Line Method Crane Example LO 3 11-4

5. Methods of Depreciation Diminishing-Charge Methods ILLUSTRATION 11-2 Data Used to Illustrate Depreciation Methods Data for Stanley Coal Mines Sum-of-the-Years -Digits. Each fraction uses the sum of the years as a denominator (5 + 4 + 3 + 2 + 1 = 15). The numerator is the number of years of estimated life remaining as of the beginning of the year. n(n+1) 2 5(5+1) 2 Alternate sum-of-the- years calculation = 15 = LO 3 11-5

6. Methods of Depreciation Sum-of-the-Years -Digits ILLUSTRATION 11-6 Sum-of-the-Years -Digits Depreciation Schedule Crane Example LO 3 11-6

7. Methods of Depreciation Diminishing-Charge Methods ILLUSTRATION 11-2 Data Used to Illustrate Depreciation Methods Data for Stanley Coal Mines Declining-Balance Method. Utilizes a depreciation rate (percentage) that is some multiple of the straight-line method. Does not deduct the salvage value in computing the depreciation base. LO 3 11-7

8. Methods of Depreciation Declining-Balance Method ILLUSTRATION 11-7 Double-Declining Depreciation Schedule Crane Example LO 3 11-8