Sum of the digits depreciation
An asset costs €10,000 and is expected to be sold for €2,000 after four years. Depreciation is to be provided over four years using the sum of the digits method.
|
€ |
||
|
Year 1 |
Cost |
10,000 3,200 6,800 |
|
Year 2 |
Depreciation at 3/10 of €8,000 Net book value |
2,400 |
|
Year 3 |
Depreciation at 2/10 of €8,000 Net book value |
1,600 |
|
Year 4 |
Depreciation at 1/10 of €8,000 Net book value |
800 |
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