STRAIGHT LINE Method of Depreciation in 3 Steps!

[@AccountingStuff]

Hope you found this one useful! TIMESTAMPS 00:00 - Intro 00:11 - What is Depreciation? 00:22 - What is Straight Line Depreciation? 00:35 - Example 01:20 - Step 1: Write Down What You Know 01:46 - Step 2: Build a Depreciation Schedule 02:34 - Step 3: Calculate the Depreciation Expense, Accumulated Depreciation & Book Values 03:13 - How to Calculate Straight Line Depreciation Expense 05:52 - Straight Line Depreciation Graph

[@hmsports1668]

thanx a lot bro.u have been a lot of help for me means a lot i hope u keep going with the good work

[@AccountingStuff]

@@hmsports1668 No worries, all the best :)

[@venusarora5055]

Hi...really great videos. Could you please make a video on the landlord allowance and its accounting treatment ? Would need it for my current projects.

[@PulzRemix-v1f]

Definitely , your videos are great

[@IsaacHolland2021]

anyone else here tryna learn a unit worth of accounting before their exam tommorow? 😅

[@AccountingStuff]

Good luck!!

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Acct1220 from uofg 😂 we got this

[@chaotik838]

2 hours before 😭😭😭😭

[@AccountingStuff]

Hope it went well! Good luck :)@@chaotik838

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me xD

[@leninvale4717]

As an accountancy student in South East Asia, a prime challenge of learning Accountancy is understanding the language of the standards, because man they are really really confusing. But stuff like this makes it a bit more bearable, AND understandable. I really hope you cover more topics soon, and if possible, start a series targeted specifically for us students as well.

[@richardreyes3764]

Dude you’re a literal goat man!!! Jesus Christ I wanna send you some home made enchiladas

[@dyrtnap9532]

Second time this year your videos have saved my butt in accounting!! Your breakdowns are amazing, clear concise and actually give more insight into "what if" scenarios than the prescribed textbooks my professor recommended! Not only do you explaining the concept itself, you're showing the different ways of application and how it will affect the books. Thank you so much for making these videos - YOU'RE AWESOME!!

[@AccountingStuff]

Haha, no worries Susan! All the best

[@shauntaewallace6268]

I've literally have been passing my accounting class because of you. Thank you so much bruh like honestly, you have no idea how much these videos help.

[@shemmurray9208]

This video came out at the perfect time 👌🏾

[@AccountingStuff]

Haha, hope you find useful!

[@_pingu00]

Depreciation gives me headache as a rookie bookkeeper. You deliver it in easy and effective way so thumbs up!

[@Potencyfunction]

You need education to understand a falling linear funktion. You learn that in 6th grade (the function not the accountability/ to calculate the net profit of your company investment )

[@tuantominh2352]

Really, I am learning about Fix Asset for D365, and I got a big trouble of understanding the process. Thanks a lot man.

[@Doesitmatterson]

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[@haidinh6545]

The quality of the videos is getting much better! Keep up the good work man! Really looking for the DDB method!!

[@AccountingStuff]

Thanks Hai! I'm working on DDB right now

[@thienuzumakiclan]

Your video is really straight forward. I'm an international student, but I can get what you're saying. Most of my instructors are speaking too fast that I can't even catch up the lesson. Thank you for helping me comprehend the method.

[@AccountingStuff]

Glad you enjoyed it!

[@fiftyfiftylifestyle456]

LITERALLY was stuck on this for my quiz and you have explained it PERFECTLY. I like how you give tangible examples and really drill down and explain things. Have subscribed and will keep coming back.

[@AccountingStuff]

Thanks Bibi, great to hear that it's making sense!

[@rsubrun]

This man is a life saver.

[@jasontr2011]

Really great job with this video! You should be a professor for a university. I have a bachelors in Accounting and Finance and am going for my Masters in Accounting, and you're better than any professor I've ever had.

[@AccountingStuff]

Thanks Jason, all the best with your Masters Degree!

[@isaacchirwa9785]

Four lecture explained in such a short period. Thank you for this stuff. Helped me a lot

[@annazimmerman225]

Thank you James! You broke it down beautifully at a nice pace and your charts are very helpful. Will look for more of your videos. I just purchased your pack of cheat sheets. I am in intermediate accounting. You are great!

[@AccountingStuff]

No problem Anna, thanks for supporting the channel! I appreciate it

[@alicewu6674]

Thank you so much, I was so confused and all other videos are confusing as well, but your videos are so clear and well explained that really helped me understand the methods of depreciation!

[@akshat6007]

Love you James,,, please keep coming up with such videos, Your dealer trick has helped me a lot

[@AccountingStuff]

Cheers Akshat, I plan to release a bunch more very soon. Great to hear that you're enjoying DEALER!

[@AzaFayz]

Really missed your accounting videos! Will you consider making videos about financial ratios?

[@AccountingStuff]

Yes I'd like to cover them soon. Stay safe!

[@vijayvittal8617]

Bro with great power comes great responsibility We await your videos Please create videos on management accounting

[@AccountingStuff]

Haha thanks Vijay and cheers for your suggestion

[@KhalidNageb]

Nice way of explaining this content and the video creation is magnificent.

[@AccountingStuff]

Cheers Khalid :)

[@abdirisakabdimahadahmed1536]

The right time out this video i think you my hero bro you saved two exams and this will be three

[@AccountingStuff]

Good luck, I hope it goes well!

[@lenas1281]

JAMES YOURE SAVING MY DEGREE I LOVE YOU

[@mcnab4ever]

Great to see you back, James! We all missed you

[@AccountingStuff]

Thanks Jens!

[@muhammadtalhakhan7477]

Your videos are helping alot of people. Your way of teaching is amazing. ❤️❤️❤️

[@AccountingStuff]

Thanks Muhammad!

[@PoonamSharma-xz4bd]

I am working as a bookkeeper with a company from last 7 months, and I am still struggling. And your videos are so helpful. You should get Dronacharya award in the field of Accounting sports. You are the best coach.

[@AccountingStuff]

Hey Poonam, sorry to hear that you're having a hard time at work. I hope things improve for you soon. All the best!

[@naomikibret7704]

I'm watching this over and over again tnx man 🖤🖤

[@ImranKhan-sk4zt]

Wowwww first one to comment, love from India Thanks for Fixed Asset video Jammmmmmesssss!!!!!! 🙏🤘💯

[@AccountingStuff]

Love from Canada! Stay safe!

[@mariashl2578]

I am studying accounting in turkish , it's a bit different but your videos are really helpful, thank you !

[@AccountingStuff]

It must be tough to learn accounting in 2 different languages! Good on you

[@gbaca07]

Thank you for making it so simple to understand.

[@yasminjasmin6941]

My favorite teacher 😘

[@bakabby1]

you have saved me in so many ways. thankk youuuu . please keep uploading more videos .

[@AccountingStuff]

No worries, I'm happy to help!

[@maisaaalsoghayir7054]

This video is Highly recommended, thank you so much

[@AccountingStuff]

Thanks, glad you enjoyed it!

[@nailpolishfreakify]

your videos actually help so much. please keep making accounting videos!

[@AccountingStuff]

Cheers, will do!

[@netflixobsessions3596]

dude this video is top notch ! it really helped me lol very well appreciated man

[@BrickSquad-xj4hp]

You posted this video the day my professor introduced the topic. Could not have timed that better lol

[@AccountingStuff]

Haha that was by pure chance. Hope it helps!

[@HanimpaGinuo]

An amazing accounting teacher with clear and well explanation 💯❤ thank you so much 🙏this video is really helpful 💯

[@AccountingStuff]

Glad it was helpful!

[@RosaRamirez-pd3xy]

This was extremely useful. You made it easy to understand. Thanks.

[@AccountingStuff]

Thanks Rosa, glad it's making sense :)

[@AC_Blanco]

Production quality is on point!

[@AccountingStuff]

Thanks Aaron!

[@hcplsmf]

I appreciate the amount of effort you put into your videos, subscribed!

[@AccountingStuff]

Welcome aboard!

[@HOMEFOODMANIACS]

Thanks James dude 😀 it is useful Stay home stay safe

[@AccountingStuff]

Cheers Munesh, hope all is well with you

[@HOMEFOODMANIACS]

Accounting Stuff yeah Entire India is in lock down for 21 days,I heard UK is in severe stage Stay home stay safe

[@HOMEFOODMANIACS]

Accounting Stuff man do videos regularly

[@AccountingStuff]

@@HOMEFOODMANIACS Yes these are rough times for all. Please stay safe

[@AccountingStuff]

@@HOMEFOODMANIACS I plan to release a bunch more whilst I'm 'Social Distancing'

[@zainbuddy]

Good to see you Love from Pakistan 🇵🇰

[@Moe_rezaei]

Best accounting channel :)

[@AccountingStuff]

Thanks mate!

[@minuteexamprep675]

4:03 (calculation of depreciation expense) learn format YO DAC 5:12 Accumulated dep same as dep exp 5:12 Closing value = opening val- dep exp ☆repeat process again till no. of given years of useful life of asset (⚠️New opening value is previous closing value)

[@lubnaabuasaker9537]

My God, this video is in perfect time I am studying chapter 11 intermediate accounting 😂, perfect❤......

[@AccountingStuff]

Serendipity!

[@BookyWickey]

i wish you were my professor in uni, i love your vids, keep it up 🙌

[@AccountingStuff]

Thanks! 😃

[@suspiciousafternoon]

thanks for explaining this in a simple easy to understand way

[@AccountingStuff]

No problem, hope it made sense!

[@andrewandal8000]

Flawless video as always full of new techniques

[@AccountingStuff]

Thanks Condura!

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You are a savior ❤❤❤❤

[@alonkulungrai3796]

I hope every teachers' teaching styles were like that of yours.

[@ireneleraltajimenez2547]

Hi James I am studying aat level 3 e-learning and your videos are helping me a lot to understand everything. I was wondwring if you could say in this video the dual effect of the depreciation and de journals thank you

[@ravisonilal7054]

This helped me so much Thank you soo much man Keep up the good job 👍🏻

[@AccountingStuff]

Cheers Ravi, glad to hear it!

[@johnq3543]

Thank you James... another good one !

[@eatmorepizzas]

THank you for making that so digestible!!

[@AccountingStuff]

No worries :)

[@lksjdflksjdf1784]

Hey, thanks for this great video! Currently studying a Cert 4 in Bookkeeping & Accounting during this isolation, and your explanations has helped me solidify these concepts (as my learning guide I've been given are rife with grammatical errors and misspelt words, to add to my confusion even further!) Just a question regarding pro rata - how can your formula adapt to calculate pro rata? My layman's understanding is pro rata helps you depreciate your purchase by taking into account the actual time you have owned it, for example purchasing something halfway through the year. I'm presuming the formula would be different for the first and last year of ownership, if the asset is sold and then lastly scrapped half way through the year. Eager to hear your thoughts, as you succinctly present seemingly complex concepts in accounting (well, it sure seems complex to me!)

[@shantelhalley6976]

Great video... simple n to the point... thank u

[@AccountingStuff]

Glad you enjoyed it!

[@ynl7329]

Hey James, could you make videos about bonds and other liabilities? Your video series are sooooo helpful and I also bought some cheatsheets on your website!! Thank you and stay safe!!

[@AccountingStuff]

Hey thanks for supporting the channel! Cheers for your suggestions.

[@khawaga0]

As usual perfect ❤️

[@AccountingStuff]

Thanks Mo!

[@khawaga0]

@@AccountingStuff My professor ❤️❤️❤️

[@agonlinetutor3700]

Very well explained James...

[@abihasami7287]

Superb less time and quick overview

[@AccountingStuff]

Thanks buddy :)

[@ritohlungwana8809]

Great stuff 👏 👏

[@joshuadasilva8421]

Great video! Can you please do a video on the diminishing balance depreciation method as well

[@AccountingStuff]

Cheers Joshua, thanks for your suggestion!

[@chikadim1477]

Hello James, I am so glad I found you here on KZbin, you have made my understanding of accounting so easy.Please can I contact you personally?

[@AccountingStuff]

Hey Chika! Sure thing, it's easiest to email me or send a DM on instagram

[@sweetpotatoes1955]

Thank u so much your videos are really really helpful

[@bayzell959]

Just subscribed, Keep it up with the great content man!!

[@AccountingStuff]

Cheers Dom, great to have you on board!

[@arafathshuvo147]

Will you kindly do some videos of practise some problems(Advanced) those topic. I have a whole crew watching your videos.

[@AccountingStuff]

Hey Arafath, thanks for your suggestion!

[@dominickyalo9599]

Hello, thanks for the great lessons. I would like to know how do you comeup with the residual value?

[@gayatrideshmukh6602]

amazing stuff, loved all vids

[@AccountingStuff]

Thanks Gayatri!

[@JohnGrattafiori]

How do I journal or enter an assets residual value

[@danipm9915]

Where's the next video? 😥😄😄😄 Very good method of teaching Accounting. It's really helpful. Thank you very much, James! 🙂

[@AccountingStuff]

I'm working on the 4th in this series

[@ankitsawde30]

Love the way you explain !!!!! It really helped me alot. Thank you so much James. Could you please make a video on Bad debts and their provisions.

[@AccountingStuff]

Thanks for your suggestions!

[@asfandshakeel8427]

Thanks mate! This was super helpful.

[@AccountingStuff]

No problem Asfand, glad to hear it!

[@IrfanKadi]

James your videos are excellent, I wanted to know if you have or plan to make videos that explain all the stock marketing RATIOS. PE Ratio, EPS etc. You explain things in very simplified manner with actual examples due to which a non-accounting person like me also understands. So I am really looking forward to videos that explain the ratios.

[@AccountingStuff]

Thanks for your suggestion! Yes I'd like to create a whole series on this topic. It's in the works :)

[@TheodenEdnewDoesDnD]

Great explanation. Subscribed.

[@AccountingStuff]

Cheers, great to have you on board!

[@masudarrahman5016]

I watch your video in Bangladesh.

[@jennycaleb7073]

Very helpful indeed...thank you

[@AccountingStuff]

No problem Jenny, I'm happy to help!

[@jenniferanthony1228]

Hi James, your videos are very helpful, can you make a video on Amortisation Schedule

[@AccountingStuff]

Hey Jennifer, thanks for your request!

[@lorrainemolebatsi1432]

Hello James, may you please do a video on straight line depreciation combined with the hire purchase

[@AccountingStuff]

Hey Lorraine, thanks for your suggestion!

[@mitchellewilliam7608]

This helped a lottt

[@AccountingStuff]

That's great to hear!

[@kennethybanez2925]

Sir James Good day , may I ask if where did you get the Value 1 for straight line depreciation rate? We're be multiply by useful life. Where did you get the Value or given ONE ?

[@natasharamkissoon8780]

I really find your videos helpful. Could you do a video on forecasting and valuation in financial accounting?

[@AccountingStuff]

Hey Natasha, thanks for your suggestion!

[@shunarilucas8488]

Trying to understand the depreciation value for the 2nd year when an upgrade was done to the asset and it extended the life by 2 more years and added an additional $2100 to the salvage value. Any guidance would be appreciated.

[@stuiedaman]

This works great if you bought the asset on 1/1/xx, any other day not so much

[@vsevolodsyskin9107]

Awesome!

[@AccountingStuff]

Thanks!

[@jonatanleandoer9006]

Thanks James !

[@AccountingStuff]

You're welcome :)

[@sandrine964]

Thank you James for thoses wonderfull videos. Why did you use a residual value? Where I work we depreciate 100% of the Asset cost.. is there some Accountancy Rule to define this value? Thanks!

[@bradpaulp]

This was a really easy to understand accounting lesson! I’m so glad most of my assets are less than the $2500 here in US which lets me write off 100% in year one. This is very common here. Question tho: if I have an asset if let’s say $2400 is there a reason to depreciate it over 2-3 years for instance instead of doing 100% year one?

[@agonlinetutor3700]

Most of the companies will have a capitalization policy, some companies set minimum thresholds for an item to be considered a fixed asset. The purpose of the capitalization threshold is to prevent the business from placing immaterial expenses on the balance sheet instead of recognizing them as an expense in the period incurred. In determining the level of expenditures to be capitalized, you must consider the size of your business, the use of your capital items, your level of revenues and expenses etc... basically the materiality of the transactions. if you are dealing in millions then no pint of capitalizing a trivial amount.

[@AccountingStuff]

Hey Brad, it's important to recognise the difference between Financial Accounting and Tax Accounting. These are separate beasts... in Tax Accounting you might find it beneficial to write off as much as allowable, as soon as possible since this could reduce your current year tax bill and free up some cash. However in Financial Accounting the focus is on preparing financial statements that show a 'true and fair view' of the business.

[@azeemrock8168]

AWESOME DUDE.....really useful

[@AccountingStuff]

Cheers!

[@stephenfreeman9048]

How do you work out a piece of machinery life span? Great content btw

[@abdulwasi6001]

Love you sir ❤ from Afghanistan 🇦🇫

[@AccountingStuff]

Thanks Abdul! All the best

[@lilliankwok358]

Great video as usually! I was struggling with this calculation and I’m still trying to understand. Just 1 question, If a company buy the machine on July 1, the machines supposed can use 9 years. I want to calculate the 9the years book value. So I need to calculate first year as 6/12 , then 2nd year to the 9th year as 1/9 ??

[@farahnabihah6477]

Hi James.. really love your video. Can you make video about revaluation on PPE?

[@AccountingStuff]

Thanks Nabyhah and cheers for your suggestion!

[@nikkybae733]

Please sir I really found ur explanation very easy am just in grade 10 accounting student and I want to know how to diffrenciate between credit and debit sir

[@AccountingStuff]

Hey Nikky, glad to hear it made sense. Here are my Debit and Credit vids → kzbin.info/aero/PL5zKSeS09l32kAViWF4RZ2dS0DevpypGt

[@ilmailmy1060]

Hey James, can u make a video on revaluation method of depreciation.

[@AccountingStuff]

Thanks for your suggestion!

[@veronicaclaire4474]

hey james, thanks for all these video they are so helpful!!! do you think you could makes some videos about debt, like bad debts and doubtful debt. Thanks

[@AccountingStuff]

Hey Veronica, thanks for your suggestions!

[@bhaskerchitti9505]

James when we dispose an asset, for how much we need to pass entry. Because asset cost is 450000 and accumulated depreciation is 360000. Difference is 90000.

[@rhyme8932]

The difference is what we need to do the entry of

[@anabolicasian7982]

Thank you for all your great videos! You're way better than my accounting prof LOL

[@AccountingStuff]

Cheers Zach :)

[@ericilanga]

Hey James, thank you for the explanation-it was super helpful! Would you mind explaining how you landed on the residual value estimate of $90,000? How would one arrive at this number? Is it arbitrary, or obtained from market value public data? Thank you.

[@AccountingStuff]

Thanks Eric, this is a randomly chosen number for the example :)

[@r.a.p.h4481]

Great Video James! Where does the "Accumulated Depreciation" go? In my reasoning it already left the Balance sheet as an expense (through the income Statement) in past years. So what sense does this Account make?

[@AccountingStuff]

I'll make another video covering it soon. But the quick answer is that it stays in the Balance Sheet. Accumulated Depreciation is a 'Contra Asset Account' which offsets Fixed Assets in the Balance Sheet.

[@kishangohil8089]

Awesome video! Can you please make one on disposal of assets and part exchange? Thanks!

[@AccountingStuff]

Hey Kishan, cheers for your suggestion!

[@zaintvshow1091]

Great, keep on