Question

The interest lost on the acquisition of an asset is taken into account in calculating depreciation in​

Answer 1

Explanation:

The interest lost on the acquisition of an asset is taken into account in calculating depreciation in​ Annuity method.

In general there are several methods for calculating depreciation such as straight line method, sinking fund method, Annuity method, etc.

In annuity method, depreciation on an asset is calculated by its rate of return considering it as an investment.

Answer 2

It is referred to as the annuity method.

• Depreciation is characterized as the discounting of the expense of a resource engaged with creating revenue all through its valuable life.
• The annuity strategy is used to figure devaluation on a resource by ascertaining its return rate. It requires the assurance of the inward pace of return on the money inflows and outflows of the resource.
• The IRR is then increased by underlying book estimation of resource, and the outcome is deducted from the income for the time frame to track down the genuine measure of devaluation that can be taken.
• It is ordinarily utilized with resources that have a large purchase price and long life.