Depreciation reflects the pattern of benefit flowing from tangible asset(s) – property plant & equipment (PPE) – to the entity holding it.

There are many types/categories of PPE like building, machinery, plant, equipment, fixtures, leasehold assets, vehicles.

The deprecation begins from the date when the asset is available for uses as intended by management, till the date is disposed or classified for sale.

Further, each class of asset likely to have a different useful life/depreciation rate, depreciation, capital expense, overhauling, method and alterations (addition/deletions) and many other related issues.

To deal with all these complexity accountants often use a standard schedule to report all these mentioned things related to PPE in an orderly manner.

A specimen of a typical depreciation schedule is as given below: (usually given with figures of last comparative accounting period)

The following are the main information included in the depreciated schedule. You have to fill these data to prepare the depreciation schedule.

1.) Opening Cost: this is the opening value of asset brought forwarded (b/f) from last accounting period (closing value of last period).

2.) Additions/disposals/adjustment: During the accounting period, if any capital expenditure made in respect of the asset it would be added to the cost of asset. Capital expenditure means any overhauling/replacement made that leads to additional benefits from asset or increase its useful life or improve efficiency. You must keep in mind that all other routine expenses like ordinary repairs be charged to income statement during the accounting period.

3.) Closing Cost: this is simply summation of ‘Opening cost’ and ‘additions/disposals/adjustments’.

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4.) Opening Accumulated depreciation: this is the opening value of accumulated depreciation brought forward (b/f) from last accounting period (closing value of last period).

It is the summation of all deprecation from the day when assets first time put use till year end of last accounting period.

5.) Depreciation Expense for the period: depending upon deprecation method of the particular asset (its straight line or reducing balance method as the case may be), it is the deprecation amount for the year.

6.) Adjustment: In case of any change in estimate of assumption related the asset being depreciated, like change in useful life, method of deprecation, etc. An appropriate (pro rata) adjustment be made in cost estimate as well as accumulated depreciation figure.

7). Closing Accumulated depreciation: this is simple summation of ‘Opening accumulated depreciation’, ‘adjustment’ and ‘deprecation for the period’.

8.) Carrying Value: It is calculated by taking difference of values of ‘closing cost’, ’closing accumulated depreciation’. It is also referred as net book value (NBV).

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Now, let’s move to simple practical example of depreciation schedule. On July 01, 2018 ABC plc has a plant with opening book value $ 4,000 and accumulated depreciation $ 2,000, capital expenditure during the period is $ 500, repairs $ 100. Rate of depreciation is 10% per annum.

Depreciation Schedule 2018-19 $
Cost as at July 01, 2018 4000
Addition during the period +500
Cost as at June 30, 2019(A) 4,500
Accumulated depreciation as at July 01, 2018 2,000
Deprecation during the period (4,[email protected]%) +400
Accumulated depreciation as at June 30, 2019(B) 2,400
Carrying Value as at June 30, 2019 (A-B) (4,500 – 2,400) 2,100