Formula of Depreciation Estimation
Estimation Formula : Depreciation in Well-Fixed Asset Program
1.Formula ( SLY ) : is the calculation formula, therefore DP = ( Cost x Rate )/Number of days in that year X Number of estimated days
2. Formula ( SL ) : is the calculation formula, therefore DP = ( Net Value / Number of remaining days ) x Number of estimated days
3. Formula ( SLM ) : is the calculation formula, therefore DP = ( Cost / Number of estimated years x 12 ). This formula will not consider the number of days but DP will be equal in every month.
4. Formula ( DB ) : is the calculation formula, therefore DP = ( Net Value x (Rate x 2) )/Number of days in that day X Number of estimated days. It is the discount estimated formula.
Remark :
1. Estimation system based on actual number of days. When a year consists of 365 days or when a year consists of 366 days, it will estimate according to the actual numbers of days.
2. Rate = (100/Number of estimated years)/100
For example: Purchase asset for 10,000 Baht and start estimate DP on 01/01/2009 for 5years, it shows that this asset runs out on 31/12/2013, therefore, DP is as follows:
| DP | 31/01/2009 | 28/02/2009 |
|---|---|---|
| SLY | 169.88 | 153.44 |
| SL | 169.88 | 153.44 |
|
SLM |
166.67 | 166.67 |
| DB | 339.73 | 296.42 |
Estimation Method
1. SLY: DP = ( Cost x Rate )/Number of days in that year X Number of estimated days
Rate = ( 100/5)/100 = 0.2 and Year 2009 consists of 365 days, and January consists of 31 days.)
DP = (( 10,000 x 0.2 )/365)x 31
DP = 169.88
2. SL : DP = ( Net Value / Number of remaining days )x Number of estimated days
From example, this asset is estimated for 5years ( from 01/01/2009 to 31/12/2013 ), total days are 1,826days
Jan. DP = (10,000 / 1,826) x 31 days
DP = 169.88
Feb. DP = (9,830.12 / 1,795) x 28days, Net = 10,000 – 169.88 = 9,830.12 and number of remaining days is 1,826-31 = 1,795 days)
DP = 153.44
3. SLM : DP = ( Cost / Number of estimated years x 12 )
DP = ( 10,000 )/( 5 x 12 )
DP is166.67 Baht per month.
4. DB: Formula ( DB ) : is the calculation formula, therefore DP = ( Net Value x (Rate x 2))/ Number of days in that year X Number of estimated days
Jan. DP = ( (10,000 x 0.4 ) / 365days ) x 31 days Rate = ((100/5)/100 ) x 2 = 0.4
DP = 339.73
Feb. DP = ((9,660.27 x 0.4 ) / 365) x 28 days, Net = 10,000 – 339.73 = 9,660.27
DP = 296.42
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