Book Value Of Machine Formula

Original purchase price subsequent additional expenditures charged to the item accumulated depreciation impairment charges book value.

Book value of machine formula. In the example above the asset s book value after 6 years would be 10 000 6000 or 4000. When it reaches the end of its useful life the nbv should be equal to its salvage value. Example of book value.

Calculating net book value. It has a salvage value of php 500 000 at the end of its economic life. Net book value formula original purchase cost accumulated depreciation original purchase cost here means the purchase price of the asset paid at the time when the company purchased the assets.

Using the sum of the years digit method the book value at the end of two years is php 800 000. Several book and online pricing guides may help you determine your machine s value. Net book value original asset cost accumulated depreciation.

In this instance the depreciable base is found by adding b4 and b5. The formula used to calculate the net book value of the assets is as below. How to calculate book value the book value formula the calculation of book value includes the following factors.

Book value is calculated as the difference between the depreciable base and the accumulated depreciation. Book value may also be. Sample calculation of net book value.

Book value fc total depreciation book value 1 500 000 800 000 book value php 700 000 problem 2. Accumulated depreciation per year depreciation x total number of years. The formula for calculating nbv is as follows.