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depreciation
Depreciation is the allocation of a number of
assets that can be depreciated over the
estimated period. Depreciation needs to be
done because of the benefits provided and
the value of the assets be reduced.
DEPRECIATION
Building
Permanent
Non Permanent
Non Building
time of depreciation
1 the month of expenditure; or
2 On the completion of the project an estate so
shrinkage on first year calculated in flattened
3. With approval taxation director general, in the
month of such assets is used to obtain,
demanding, and maintaining income; or
4. With approval taxation director general, in the
month of such assets is start to produce namely
when started production and not when accepted
or procures income
4 Years
8 Years
16 Years
2O Years
25%
12,5%
6.25%
5%
ll.Building
- PERMANENT
- NON PERMANENT
20 Years
10 Years
5%
10%
Declining
Balance
50%
25%
12,5%
10%
Methods of Depreciation
1. straight line method
Straight line depreciation is the simplest
and most often used method. In this method,
the company estimates the salvage value (scrap
value) of the asset at the end of the period
during which it will be used to generate
revenues (useful life).
Depreciation
expense
Book value
at year-end
25%
Rp. 12.500.000
Rp. 87.500.000
2010
25%
Rp. 25.000.000
Rp. 62.500.000
2011
25%
Rp. 25.000.000
Rp. 37.500.000
2012
25%
Rp. 25.000.000
Rp. 12.500.000
2013
25%
Rp. 12.500.000
Rp. 0
2009
Original cost
Rp. 100.000.000
Depreciation
rate
Jaya Abadi Company purcahsed an asset that is included in the first group of
tangible assets. The cost is Rp 100,000,000 on July 10, 2009, then charging for
the cost of depreciation of these assets is based on the declining balance
method is as follows:
years
Depreciation
expense
Book value
at year-end
50%
Rp. 25.000.000
Rp. 75.000.000
2010
50%
Rp. 32.500.000
Rp. 32.500.000
2011
50%
Rp. 16.250.000
Rp. 16.250.000
2012
50%
Rp. 8.125.000
Rp. 8.125.000
50%
Rp. 8.125.000
Rp. 0
2009
2013
Original Cost
Rp. 100.000.000
Is Depreciated
Depreciation
rate
Amortization method
1. Straight line method
2. The declining balance method
l. Non Building
Group 1
Group 2
Group 3
Group 4
4 Years
8 Years
16 Years
2O Years
25%
12,5%
6.25%
5%
Declining
Balance
50%
25%
12,5%
10%
Original cost
Rp. 100.000.000
Amortization Rate
Amortization Expense
25%
Rp. 25.000.000
2011
25%
Rp. 25.000.000
2012
25%
Rp. 25.000.000
2013
25%
Rp. 25.000.000
PT Asti Jaya on 4 November 2010 pay Rp. 100,000,000.00 to obtain licensing rights
from Phoenixcyle Ltd. for 4 years to produce Bicycles Phoenix. The calculation of the
amortization of license rights are as follows:
years
Original Cost
Amortization
Amortization Expense
2010
Rp. 100.000.000
50%
Rp. 50.000.000
2011
Rp. 50.000.000
50%
Rp. 25.000.000
2012
Rp. 25.000.000
50%
Rp. 12.500.000
2013
Rp. 12.500.000
50%
Is amortization