Question

Q.1 In the Notes on Fixed
Assets of a company, Closing
WDV + Depreciation for the
year is equal to​

Answer 1

Answer:

In the Notes on Fixed Assets of a company, Closing WDV + Depreciation for the year is equal to​ Opening WDV

Explanation:

Fixed Assets:

• Fixed assets are items that a corporation intends to use in the long run to create revenue.
• Fixed assets are also known as property, plant, and equipment

Depreciation.

The monetary value of an asset drops in value over time related to use, wear and tear, or obsolescence. This reduction is referred to as depreciation.

Written Down Value (WDV) Method:

• The written Down Value method is a depreciation strategy in which the net book value of assets is depreciated at a constant rate each year..
• It also helps for recognizing more depreciation expenses in the early years of the asset’s life and less depreciation in the later years of the life of the asset.

Written Down Value Method = (Cost of Asset – Salvage Value of the Asset) * Rate of Depreciation in %

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Answer 2

Closing WDV plus Depreciation for the year equals Opening WDV in a company's Notes on Fixed Assets.

Explanation:

• Items that a business plans to use in the long run to generate revenue are known as fixed assets.
• Property, plant, and equipment depreciation is another name for fixed assets.
• An asset's monetary value decreases over time due to use, wear and tear, or obsolescence. Depreciation is the term for this decrease.
• The written-down value method is an annual depreciation technique that reduces the net book value of assets by a fixed percentage.
• Additionally, it aids in recognising higher depreciation charges in the early years of an asset's life and less depreciation in the latter years of the asset's life.
• (Cost of Asset - Salvage Value of the Asset) * Rate of Depreciation in% is the written-down value method.

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