Sunday, 29 May 2011

5. Working Hours Method

Features :
The Hourly Rate of Depreciation of an asset is calculated as—
Acquisition Cost — Scrap Value
________________________________
Estimated Total Working Hours


Annual Depreciation is found out as— Hourly Rate of Depreciation x actual working
hours rendered by the asset during the year.
It may also be called a Machine Hour Rate where total machine hours of a machine are
estimated.

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