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If you do not use the component method you can depreciate the total cost of the equipment. So your depreciation expense every year would be 80 000-8000/8= 9000. Your component has a 3 year lifespan, so you have 6000/3=2000. When you add both it gives you 11 000.
Using the component method, you would need to reduce the amount of the component from your total asset value. Your depreciation expense would be 80 000-6000-8000/8=8250. When you deprciate your component you would have 6000/3=2000. Add both gives you 10,250.
Correct me if I am wrong |
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