An analysis of the Depreciation Methods in GAAP in the UK

An analysis of the Depreciation Methods in GAAP in the UK Depreciation is the allocation of the cost of a plant asset to expense over its useful (service) life in a rational and systematic manner† (Weygandt, Kieso and Kimmel, 2003:416). There are three factors affect the calculation of depreciation, which are asset cost, useful life and salvage value (Weygandt, Kieso and Kimmel, 2003). Accountant in different companies will use various methods to compute the depreciation. There are straight-line method, reducing balance method (double declining balance, sum of digits, reducing percentage), annuity method, and unit of production method (Mike, Ron and Allister, 1994). And in most companies, especially in the large corporations, they will use the straight-line method, because it is the easiest one to compute the depreciation. This essay will illustrate some method that usually used in the companies and contract with each method to find out which one is the most useful. At the beginning, the essay will illustrate the straight-line method , the second one is reducing balance method, the third method is sum of digits, and the last one is the unit of production method. Below each method, the essay will give an example, which is calculated by me. Under the straight-line method, the annual depreciation expense is the same over the asset’s estimated useful life every year. The annual depreciation expense is determined by depreciation cost divided by the useful life of the asset or multiplied by the annual rate of depreciation (Weygandt, Kieso and Kimmel, 2003). Example 1 An asset costs  ¿Ã‚ ¡11,000, its expected salvage value is  ¿Ã‚ ¡1,000, its estimated useful life is 5 years. Depreciable cost = ¿Ã‚ ¡11,000- ¿Ã‚ ¡1,000 = ¿Ã‚ ¡10,000 Annual depreciation expense = ¿Ã‚ ¡10,000/5years= ¿Ã‚ ¡2,000 OR Annual rate of depreciation =100%à ·5years=20% Annual depreciation expense = ¿Ã‚ ¡10,000*20%= ¿Ã‚ ¡2,000 Year 1 Cost  ¿Ã‚ ¡11,000 Depreciation 2,000 Year 2 Net book value 9,000 Depreciation 2,000 Year 3 Net book value 7,000 Depreciation 2,000 Year 4 Net book value 5,000 Depreciation 2,000 Year 5 Net book value 3,000 Depreciation 2,000 Net book value 1,000 The straight-line method is the simplest way among all the methods; it suitable for the use of asset is unvarying during the useful life; it is popular used by large corporation, such as Campbell Soup, Marriott Corporation and General Mills. However, the reducing balance method has a falling depreciation amount every year during the useful life of the asset. The changing depreciation is depended on the book value (cost less accumulated depreciation). It is calculated to multiply the book value at the beginning of the year and the reducing balance depreciation rate (Weygandt, Kieso and Kimmel, 2003). Example 2 An asset costs (book value at the beginning of year)  ¿Ã‚ ¡11,000, its expected salvage value is  ¿Ã‚ ¡1,000, its estimated useful life is 5 years. Reducing balance depreciation rate = 100%à ·5years=20%* Calculation o f  ¿Ã‚ ¡901.12( ¿Ã‚ ¡4505.6ÃÆ'-20%) is adjusted to  ¿Ã‚ ¡3505.6 in order to make the book value equal salvage value (Weygandt, Kieso and Kimmel, 2003). Sum of digits is another kind of reducing balance method, which has the closest connection with useful life and salvage value of the asset. The depreciation cost is multiply depreciation cost (asset cost less salvage value) by digits of each year (Mike, Ron and Allister, 1994). Example 3 An asset costs  ¿Ã‚ ¡11,000, its expected salvage value is  ¿Ã‚ ¡1,000, its estimated useful life is 5 years The digits add up is 1+2+3+4+5=15

A Systematic Comparison Between Traditional and Agile Methods Essay

A Systematic Comparison Between Traditional and Agile Methods - Essay Example Project management is a methodical technique to managing and scheduling project resources and tasks from inauguration to completion. However, these tasks and resources are separated into five stages, i.e. initiation, planning, executing, controlling, and completion or termination of the project. In fact, this standard format of the project management can be used for almost every kind of project, in view of the fact that its basic purpose is to systematize the different processes of project development (Kerzner, 2006; Haughey, 2009; TechTarget, 2008). Normally, the project management techniques are classified into two categories: traditional project management and agile project management. In traditional project management, project plans and cost estimates are normally developed once, in a front-loaded mode, and the remaining activities of a project involve adjusting to reality. On the other hand, in agile project management, every iteration is an opportunity to go back over the plan and adjust to reality for the next iteration (Freedman, 2010). Traditional project management approaches Traditional project management works fine for a lot of projects and environments. Actually, traditional project management makes use of the traditional tools and techniques for management and solving problems. In simple words, â€Å"the traditional project management is 'a collection of tools and techniques that can be used to perform an operation that seeks an end product, outcome, or a service†. These traditional tools and techniques can include the use of PERT chart and Gantt chart to estimate the schedule or plan the project (TutorialsPoint, 2012). The major advantage of the traditional project management methods is that they are plan driven and they follow a sequence and management approach to project development. Thus, the use of the traditional project management methods allows completing a complex project in a sequential phase wise manner where all the requirements are collected and approved at the beginning. And on the basis of these requirements software design is completed next and finally master design is executed to build high quality software. Another advantage of the traditional software development methods is they are very well-organized and purposeful planning and control methods. These methods allow us to recognize the distinct project life cycles (Rehman et al., 2010; Szalvay, 2004; Serena, 2007). Despite a lot of advantages associated with these methods, they have certain drawbacks as well. According to these methods, all the project requirements must be completed and approved before the project is initialized. On the other hand, in case of a large size and complex projects it is not possible to collect all the requirements before beginning the project. Hence, we will need to make some changes to the project requirements which will change design and as a result the entire project development will be affected (Rehman et al., 2010; Szalvay, 2004; Serena, 2007). In addition, the traditional project management methods are aimed at dealing with large size development projects, and the issues and challenges in determining and handling these endeavours to effectively carry results. Additionally, these methods were a great deal

Summarising and evaluating the contributions made to the Semantic Web Essay

Summarising and evaluating the contributions made to the Semantic Web research area and Challenges of the semantic web - Essay Example While the progressive implications of the Semantic Web are evident there remains a number of varying contributions and challenges to the overriding movement. Ontologies are one of the prominent aspects of the Semantic Web. As the Indeed, as the Semantic Web is divided into a number of hierarchical layers, it’s noted that, â€Å"the Ontology layer, in form of the OWL Web Ontology Language, is currently the highest layer of sufficient maturity† (Lukasiewicz and Straccia 2007). While ontologies are highly contingent elements within the Semantic Web one of the primary problems related to their implementation is the notion of vagueness. Current approaches to vagueness issues have been approached by a variety of formalisms; for instance Google uses probalistic techniques. One of the most pervasive concerns in terms of vagueness is the understanding that linguistic elements oftentimes contain within them necessarily vague structural demarcations. For instance, Lukasiewicz and Straccia (2007) note the difficulty in determining the true extent that a tomato is ripe; one considers that young or tall would produce similar search diffi culties. Still, it’s recognized that considerable development is needed in this area, with current research focusing on description logics. Another prominent challenge of the Semantic Web is in terms of uncertainty. While vagueness issues are relegated to linguistic elements that lack a definite boundary, uncertainty challenges can be understood -- as indicated by Lukasiewicz and Straccia (2007, p. 3) -- as including â€Å"all those approaches in which statements rather than being either true or false, are true or false to some probability or possibility (for example, â€Å"it will rain tomorrow†)†. In these instances, uncertainty is further understood in terms of probability and possibility, with possibility regarded as entirely