Depreciation Net Book Value Formula

Book value of assets formula.

Depreciation net book value formula. The vehicle is worth 34 000 at the end of year one. Calculating net book value. In year two depreciation is 5 100 34 000 x 15 percent and in year three depreciation is 4 335 28 900 x 15 percent.

Other cost include impairment cost and related costs. Accumulated depreciation per year depreciation x total number of years. Note how the book value of the machine at the end of year 5 is the same as the salvage value.

Net book value original asset cost accumulated depreciation. When it reaches the end of its useful life the nbv should be equal to its salvage value. The net book value of an asset is calculated by deducting the depreciation and amortization of an asset from its original cost.

Depreciation 2 straight line depreciation percent book value at the beginning of the accounting period. Total value of the asset value at which the asset is purchased. In this case the machine has a straight line depreciation rate of 16 000 80 000 20.

The depreciation rate is the annual depreciation amount total depreciable cost. As the name suggests it counts expense twice as much as the book value of the asset every year. Formula for net book value net book value cost of the asset accumulated depreciation.

The formula for calculating nbv is as follows. Under the straight line depreciation method the company would deduct 2 700 per year for 10 years that is 30 000 minus 3 000 divided by 10. The original cost of an asset includes the original cost of acquisition plus any costs associated with the delivery and intended use of an asset to the purchase price.