Please let me know if you have any topic suggestions :) TIMESTAMPS 00:00 - Intro 00:10 - What is Depreciation? 00:21 - What is the Double Declining Balance Method? 00:34 - Example 01:07 - Step 1: Write Down What You Know 01:35 - Step 2: Build a Depreciation Schedule 01:59 - Step 3: Calculate the Depreciation Expense, Accumulated Depreciation & Book Values 02:51 - How to Calculate Double Declining Depreciation Expense 05:15 - Double Declining Balance Depreciation Graph
Excellent video as always! I just got into an accounting program after changing my major from engineering. But, is this method the same as 'Reducing Balance Method'? Thank you in advance :D
McGrew-Hill Connect can pound sand. Figured out the question just from 3 mins of this vid vs 30 mins trying to understand what they put.This guy is where its at
I don't know how to say thank you. Thanks to your videos, I got 98% in my first and second exams. I watched them all, and they helped me tremendously. You are one of the best teachers.
You seem so motivated to make great TH-cam video! I bet that burst of motivation come from spending years behind a office desk and just having enough. xD
In Accounting world - there are a few choices so it depends on the specifics of the situation In Tax world - there are guidelines determined by your local tax authority which you need to follow
Hi James, great video again. One question: what happens after 5 years have passed? Do you stop depreciating it and consider it a fixed $194 value after that?
You're such an inspiration Accounting Stuff, I now have an accounting tutorial because I applied what I have learned from you but I am focusing more in excel. Your way of teaching is superb. I want to grow in youtube like you. AND OF COURSE I need your confidence
Accounting Stuff wahhhhh i am very happy you replied to me... for some reason i am a teacher but you're my teacher too 🙂 can i screenshot this and show to my students? I am like a kid☺️ 💗
Inorder to calculate depreciation, you need to ascertain the cost of your asset. I always hit a dead end when I try to calculate the cost of the asset. Adding tax, assembly and installation expenses, deducting trade discounts from purchase value,insurance,custom and duty etc. If there's one expense/income that I really can't get my head around is the 'Income(by products) generated from the trial run of the fixed asset' Companies do this inorder to ensure the effectiveness and efficiency of the asset before the asset can be considered useful to the company. Trial costs are added but income generated from trial cost is subtracted Can u plz elaborate on this?.
Hi James, I've been following all of your accounting videos lately and I'm proud to say that I'm learning a lot by the way what will happen to residue value?.
Hi James, is residual/salvage value ignored in DDBM or is this simply an example without one? I want to be sure I calculate correctly on my tests. Thank you!
Yes, residual/salvage value is ignored when using the double declining balance method. you start with your asset cost ( not asset cost- residual value like in other methods) PS: I know your comment is two years old so this answer is probably useless to you but I'm answering for other students that were also confused (like I was a few minutes ago)
How would taking bonus depreciation in first year, to expense full asset, affect the 3 main financial statements? No one talks about section 149 or bonus depreciation and it's ramifications on Financials
Hi, I have some questions. What would you say is the best route which would allow me to fast track my way to a high paying career in accounting. Should I consider university or apprenticeships or degree apprenticeships. I'm also not sure as to which accounting degree is the most prestigious. I always thought it was the aca or acca but after watching lot's of accounting videos I'm not sure anymore. Some clarification from a professional like you would be much appreciated. Thanks!
Hey Andrej, there are a whole bunch of different career paths that you could take. An effective one that I've seen is to start off in Audit and stay there until you are promoted to a Manager or Senior Manager. After that you can move into industry to work as a Financial Controller or Director. However not everyone is suited to Audit and it's not the only option. In terms of qualifications it really comes down to the country that you live in. They are all slightly different. Personally I have an ACA because I studied in the UK. But the ACCA is also respectable. All the best!
I assume you take the value at the 7th year as your final depreciation value? Otherwise the graph continues onto infinity, it doesn't ever reach zero in the formula? Silly question as I'm not sure how accountants handle things.
Hi! First off, thank you for all the great content you make it has seriously helped me solidify my accounting knowledge :) Second, I have a few question regarding my accounting assignment. In my income statement, my business in its 1st year of operations incurred a loss and I am not sure if this translates onto the balance sheet as "retained profits" section of equity? And if so would I have to deduct this "loss" from my contributed capital? Also, in my business scenario for the 1st year, a transaction states "electricity bill estimated at $8,800. Bill not received" would I record this on my income statement and balance sheet (for that 1st year) even though the business has not paid for it yet or would I only record it when the bill has been received and paid for? (ps. the business receives the actual bill in the 3rd year) Thank you!!
Hey Cindy, a loss in your first year would translate to negative retained earnings in the equity section of your Balance Sheet. Capital Contributions are a separate item in this section and are considered separately. I explain this in detail in this video → th-cam.com/video/Fr5oHEYrT2A/w-d-xo.html
Can we depreciate up to 50pc of the equipment cost in the first year of service? I saw an article mentioning this as 250 declining method but haven't found any mentioning of it on the IRS website.
Love your videos! Could you do a video on margins? Mainly contribution margin and operating margin and how financial analysts uses these metrics to make financial decisions?
Congrats! Another amazing video. Was wondering, if you have to calculate depreciation via this method for 3 months for instance, then how would you do that? I’ve been trying to do this, have an exam tomorrow, and it’s not working out.
Equipment was purchased for R460, 000 with an estimated life of 10 years and a residual value of R19, 000. What is the depreciation expense for the first 5 years using each of the following separate depreciation methods? a. Double-declining balance (15) b. Sum of the years’ digits this one is different please help
Can you do an explanation in the change of depreciation method of an asset in the middle of the asset's life? Such as a double declining depreciation method to sum of the years digit ect.
Can you please do a video on Cost volume profit, Absorption costing vs ABC Costing or Strategy map and balanced score card. Would be much appreciated as I have an exam in a month time and your videos really help make things clear and precise. thankyou from a university student studying accounting financial management
i have got a question, so when i first googled (before watching this of crs), it gave me a formula: 2*(asset cost - accum. depr.) / useful life but now i see that in what you have given us it is different: 2*(1/useful life)*opening book value P.S. it didn't come out to be the same
Im following you from morocco 🇲🇦 just to learn accounting in English cuz im studying french accounting it the same depreciation in french is les amortization
a company acquired a machine on 01.01.2013 at cost of 130,000 and spent 2,000 on its installations and 3,000 on trasport. Life of the machienry is 10 years. The company uses the declining balance method of depreciation for machinery at 30% a year. the books of accounts are closed on the 31st december every year. what will be the depreciation charge for the year 2015(year 3)? a)19,845 b)28,350 c)13,500 d)88,695 e) none of above answers is correct Someone could help me?
Are you working on new videos. I would like to see you do videos on a more intermediate level of accounting. You showed us perfectly the beginner levert now we’re ready for that next level.
This video is not easy to understand... :( Is the double declining method is the same as diminishing value method ? If so... isnt the formula cost x rate and if it is partly purchased during the year the remaining months divided by 12 multiplied by the cost x rate ?
Hey Beste, the Double-Declining Balance Method is similar to the Diminishing value method but it's not exactly the same. You are correct regarding purchases made during the year.
Thank you that is relieving! I just passed my assessment onto the server which was about depreciation and was confused if I did it wrong. Trying to put pieces together from little bit of information there and little bit from there. Your videos are amazing and very helpful. Thank you
a company acquired a machine on 01.01.2013 at cost of 130,000 and spent 2,000 on its installations and 3,000 on trasport. Life of the machienry is 10 years. The company uses the declining balance method of depreciation for machinery at 30% a year. the books of accounts are closed on the 31st december every year. what will be the depreciation charge for the year 2015(year 3)? a)19,845 b)28,350 c)13,500 d)88,695 e) none of above answers is correct Someone could help me?
Please let me know if you have any topic suggestions :)
TIMESTAMPS
00:00 - Intro
00:10 - What is Depreciation?
00:21 - What is the Double Declining Balance Method?
00:34 - Example
01:07 - Step 1: Write Down What You Know
01:35 - Step 2: Build a Depreciation Schedule
01:59 - Step 3: Calculate the Depreciation Expense, Accumulated Depreciation & Book Values
02:51 - How to Calculate Double Declining Depreciation Expense
05:15 - Double Declining Balance Depreciation Graph
Excellent video as always! I just got into an accounting program after changing my major from engineering. But, is this method the same as 'Reducing Balance Method'? Thank you in advance :D
@@Malayamakiya Thanks for your requests!
Impairment Assessment/ Testing , please?? Love your work!
McGrew-Hill Connect can pound sand. Figured out the question just from 3 mins of this vid vs 30 mins trying to understand what they put.This guy is where its at
I don't know how to say thank you. Thanks to your videos, I got 98% in my first and second exams. I watched them all, and they helped me tremendously. You are one of the best teachers.
2 videos in a week,,, James you are on fire🔥🔥
Haha thanks Akshat
You seem so motivated to make great TH-cam video! I bet that burst of motivation come from spending years behind a office desk and just having enough. xD
Hey Jaime, I've enjoyed making videos since I was at school. It's just something that I've always done.
James, CONGRATULATIONS!!! You are an excellent teacher, fun and very professional. Thanks for sharing. May GOD bless you !!!
Thanks Michael!!
putting me through accounting class thank you!
You got this!
Great video!! I love the way you explain concepts using a story!! Thank you☺️
Thanks, I'm glad you enjoyed it!
So close to finishing! Thank you for another great video!
James can I just say...you are bloody amazing! thankyou thankyou thankyou
Thanks to your video I figured out what I was doing wrong for my double declining balance! Thank you!!!!🎉
Hello James, Thank you for all the videos. It has really helped me a lot :) Can you please make a video on how to read and analyse annual reports?
No worries Sweta, thanks for your suggestion!
Thank you :) :)
How do you determine which method to use for depreciation for a company’s assets
In Accounting world - there are a few choices so it depends on the specifics of the situation
In Tax world - there are guidelines determined by your local tax authority which you need to follow
Nice,... Thank you very much for free lessons.
No worries Abdul, you're welcome!
Hi James, great video again. One question: what happens after 5 years have passed? Do you stop depreciating it and consider it a fixed $194 value after that?
In theory you would pick a residual value and stop once you hit it
Hoping you'll save my life for the Thursday exam bro
Really appreciate all your videos!
You’re a life saver!!! my homework is due in 2 hours😂
You're such an inspiration Accounting Stuff, I now have an accounting tutorial because I applied what I have learned from you but I am focusing more in excel. Your way of teaching is superb. I want to grow in youtube like you. AND OF COURSE I need your confidence
Great to hear that you're helping teach others! All the best
Accounting Stuff wahhhhh i am very happy you replied to me... for some reason i am a teacher but you're my teacher too 🙂 can i screenshot this and show to my students? I am like a kid☺️ 💗
Yeah he is back!
Inorder to calculate depreciation, you need to ascertain the cost of your asset. I always hit a dead end when I try to calculate the cost of the asset. Adding tax, assembly and installation expenses, deducting trade discounts from purchase value,insurance,custom and duty etc. If there's one expense/income that I really can't get my head around is the 'Income(by products) generated from the trial run of the fixed asset' Companies do this inorder to ensure the effectiveness and efficiency of the asset before the asset can be considered useful to the company. Trial costs are added but income generated from trial cost is subtracted Can u plz elaborate on this?.
Mate! This was Excellent! so simple and easy to comprehend
Glad it helped!
Hi James, I've been following all of your accounting videos lately and I'm proud to say that I'm learning a lot by the way what will happen to residue value?.
It would be highly useful, if you could possibly start a series on Partnership Accounts
I agree
Hi James, is residual/salvage value ignored in DDBM or is this simply an example without one? I want to be sure I calculate correctly on my tests. Thank you!
Yes, residual/salvage value is ignored when using the double declining balance method. you start with your asset cost ( not asset cost- residual value like in other methods)
PS: I know your comment is two years old so this answer is probably useless to you but I'm answering for other students that were also confused (like I was a few minutes ago)
Well explained mate :) Keep up good work 👍
Thanks, will do!
Apologies if this is a bad question to ask but what assets of the company should this method be used for?
Man you're literally my saviour 😢❤
Glad you're finding these useful!
Hey James, can you cover topics related to revaluation of depreciable and non depreciable assets
Thanks for your suggestions!
love your videos, really explain it nicely
Nice one James... Thanks for the video again
No problem!
How would taking bonus depreciation in first year, to expense full asset, affect the 3 main financial statements? No one talks about section 149 or bonus depreciation and it's ramifications on Financials
Thanks James!
You're very welcome :)
Mannn I needed this about a week ago😩 your videos are the best explanations out there. Please keep making more I’m taking accounting 2 this summer
Oh no, I was too late!
thanku very much man. you really help me in my exam preparation and got a new subscriber. keep it up....
No worries Usman, best of luck in your exams!
Hi James, is this the same thing or similar to the Reducing Balance method? Or is it completely separate?
As usual, great video and easy to understand explanations! Great work!
How about a video on "Impairment Assessment" or "Impairment Testing" ?
Very clear! Thanks!
Nice, glad to hear it :)
Hi, I have some questions. What would you say is the best route which would allow me to fast track my way to a high paying career in accounting. Should I consider university or apprenticeships or degree apprenticeships. I'm also not sure as to which accounting degree is the most prestigious. I always thought it was the aca or acca but after watching lot's of accounting videos I'm not sure anymore. Some clarification from a professional like you would be much appreciated. Thanks!
Hey Andrej, there are a whole bunch of different career paths that you could take. An effective one that I've seen is to start off in Audit and stay there until you are promoted to a Manager or Senior Manager. After that you can move into industry to work as a Financial Controller or Director. However not everyone is suited to Audit and it's not the only option.
In terms of qualifications it really comes down to the country that you live in. They are all slightly different. Personally I have an ACA because I studied in the UK. But the ACCA is also respectable.
All the best!
@@AccountingStuff Ok, thank you.
Accounting Stuff This was very helpful! Thank you!!☺️
I assume you take the value at the 7th year as your final depreciation value? Otherwise the graph continues onto infinity, it doesn't ever reach zero in the formula? Silly question as I'm not sure how accountants handle things.
Hi! First off, thank you for all the great content you make it has seriously helped me solidify my accounting knowledge :) Second, I have a few question regarding my accounting assignment.
In my income statement, my business in its 1st year of operations incurred a loss and I am not sure if this translates onto the balance sheet as "retained profits" section of equity? And if so would I have to deduct this "loss" from my contributed capital?
Also, in my business scenario for the 1st year, a transaction states "electricity bill estimated at $8,800. Bill not received" would I record this on my income statement and balance sheet (for that 1st year) even though the business has not paid for it yet or would I only record it when the bill has been received and paid for? (ps. the business receives the actual bill in the 3rd year) Thank you!!
Hey Cindy, a loss in your first year would translate to negative retained earnings in the equity section of your Balance Sheet. Capital Contributions are a separate item in this section and are considered separately. I explain this in detail in this video → th-cam.com/video/Fr5oHEYrT2A/w-d-xo.html
For your second question it depend on whether you are Cash or Accrual Accounting. Which are you using?
Accounting Stuff thanks for replying, I’m using accrual :)
absolutely amazing video and I follow and watching your videos from #Afghanistan
Cheers, all the best!
Can we depreciate up to 50pc of the equipment cost in the first year of service? I saw an article mentioning this as 250 declining method but haven't found any mentioning of it on the IRS website.
Love your videos! Could you do a video on margins? Mainly contribution margin and operating margin and how financial analysts uses these metrics to make financial decisions?
Thanks for your suggestions!
Congrats! Another amazing video. Was wondering, if you have to calculate depreciation via this method for 3 months for instance, then how would you do that?
I’ve been trying to do this, have an exam tomorrow, and it’s not working out.
Very good! Thank you very much, a very good and understandable explanation!
Thanks Mia, glad you enjoyed it
Hallo James.. OMG YOU ARE SO AWESOME.. THANK YOU
I am so thankful.. U jst made my day.. Love the tutorial
No worries Portia, have a good one!
Equipment was purchased for R460, 000 with an estimated life of 10 years and a residual value of R19, 000. What is the depreciation expense for the first 5 years using each of the following separate depreciation methods?
a. Double-declining balance (15)
b. Sum of the years’ digits
this one is different please help
What if the residual value is zero, should the closing book value be zero as well?
Is the closing book value at the end of useful life = to the salvage/resale value?
Nice one James
And make a video up on revaluation method of depreciation
🙏🏻🙏🏻🙏🏻
Thanks for your suggestion :)
Great video! But you forgot the residual value! :D ;)
is the working and calculation similar to Diminishing Balance Method? I'm new to the accounting course and really need help on this
Can you do an explanation in the change of depreciation method of an asset in the middle of the asset's life? Such as a double declining depreciation method to sum of the years digit ect.
Thanks for your request!
what happens to closing vaue of $194. How do we account it. Would you explain it. Thank you so much Bro
Why is there a residual value for Straight line, but not for the DDB method?
thank you it was very clear😊😊😊😊
Cheers, glad to hear it!
Can you please do a video on Cost volume profit, Absorption costing vs ABC Costing or Strategy map and balanced score card. Would be much appreciated as I have an exam in a month time and your videos really help make things clear and precise. thankyou from a university student studying accounting financial management
Thanks for your suggestions! Good luck with your revision :)
i have got a question,
so when i first googled (before watching this of crs), it gave me a formula:
2*(asset cost - accum. depr.) / useful life
but now i see that in what you have given us it is different:
2*(1/useful life)*opening book value
P.S. it didn't come out to be the same
Hey Laziz, those forumlas are the same. Opening Book Value = Asset Cost - Accumulated Depreciation
Im following you from morocco 🇲🇦 just to learn accounting in English cuz im studying french accounting it the same depreciation in french is les amortization
Learning accounting in 2 different languages must be hard work!
Accounting Stuff it’s my passion
From where did he get the straight line depreciation rate?
Please made video for bonds payable
you must do a video explaining ratios and there meaning
Did Carole Baskin kill her husband?? Haha.. but seriously thanks for your suggestion :)
Under double declining balance depreciation method; If the standard depreciation is 25%, will the book value be half every year
Is double declining the same as diminishing?
How to calculate the depreciation if you get the assets in mid year?
Could you do a video explaining goodwill and how to journal it?
Thanks for your request!
Hello James plz make hole question on half year convention of three methods straight line ,200decline balancing , 150 decline balancing switch sides
Thanks for your suggestion!
Thanks teacher
You are welcome :)
Bro why we should ignore the residual value in double declining method.
thank you so much for this video. It was really helpful!!!
Cheers Lorelyn :)
Nice one james
Thanks Munesh!
What is the difference between declining balance and double declining balance...
thank you
Please upload lecture about accounts receivables
Thanks for your suggestion!
ty mate
a company acquired a machine on 01.01.2013 at cost of 130,000 and spent 2,000 on its installations and 3,000 on trasport. Life of the machienry is 10 years. The company uses the declining balance method of depreciation for machinery at 30% a year. the books of accounts are closed on the 31st december every year. what will be the depreciation charge for the year 2015(year 3)?
a)19,845
b)28,350
c)13,500
d)88,695
e) none of above answers is correct
Someone could help me?
Merci Beaucoup
You're very welcome :)
How relevant are the cheat sheets to Accounting Studies(AAT) in the UK please?
My Cheat Sheets cover basic accounting concepts which are universal
Hey James, can you do a video on debt schedule?
Thanks for your suggestion :)
Hey man, I’m from UK, and I’m desperate for an account/finance research topic for my dissertation. Any ideas?
This helped me out a ton, thank you so much!
Nice one! Glad to hear it :)
thank for u video but why u did not used residual value ?
I probably should have included it in this. With a residual value it's the same process but you would stop when you hit it
What happens when you have residual value, and how should it be calculated?
residual value for me is: $60,000
summary
to calculate the book value at year x
given the useful life n
BV=FC (1- (2/n) )^x
Are you working on new videos. I would like to see you do videos on a more intermediate level of accounting. You showed us perfectly the beginner levert now we’re ready for that next level.
Hey Woodly, yes I'm working on new videos as we speak!
“Please” and “Thank you” wouldn’t kill you, you know?
@@ymmvee wtf? You good man?
Does Accounting Stuff have a Patreon????
5:53 You're basically the Q of Accounting, from Star Trek The Next Generation.
lol
Please I want a video of impairment
Hi dear
I think, there will not be any amount after five years.
This video is not easy to understand... :( Is the double declining method is the same as diminishing value method ? If so... isnt the formula cost x rate and if it is partly purchased during the year the remaining months divided by 12 multiplied by the cost x rate ?
Hey Beste, the Double-Declining Balance Method is similar to the Diminishing value method but it's not exactly the same. You are correct regarding purchases made during the year.
Thank you that is relieving! I just passed my assessment onto the server which was about depreciation and was confused if I did it wrong. Trying to put pieces together from little bit of information there and little bit from there. Your videos are amazing and very helpful. Thank you
I like you
You are intelligence
James, please do bad and doubtful debtors :(
Cheers for your suggestion!
Unrelated but please explain interest on drawings
Thanks for your suggestion!
could you tell me how you got that useful life of 5 years'😊
confusing stuff
How are you figuring the useful life?
First comment again haha still hoping for a followback in twitter🤞
Thanks Condura! I have a twitter account but I haven't used it in years.
a company acquired a machine on 01.01.2013 at cost of 130,000 and spent 2,000 on its installations and 3,000 on trasport. Life of the machienry is 10 years. The company uses the declining balance method of depreciation for machinery at 30% a year. the books of accounts are closed on the 31st december every year. what will be the depreciation charge for the year 2015(year 3)?
a)19,845
b)28,350
c)13,500
d)88,695
e) none of above answers is correct
Someone could help me?