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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