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.

[@SNBEATZ-v1f]

Definitely , your videos are great

[@IsaacHolland2021]

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

[@AccountingStuff]

Good luck!!

[@Undecidedbreanne]

Acct1220 from uofg 😂 we got this

[@chaotik838]

2 hours before 😭😭😭😭

[@AccountingStuff]

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

[@xuanxeno2]

me xD

[@_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 )

[@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

[@KhalidNageb]

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

[@AccountingStuff]

Cheers Khalid :)

[@gbaca07]

Thank you for making it so simple to understand.

[@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

[@HanimpaGinuo]

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

[@AccountingStuff]

Glad it was helpful!

[@leme9720]

This man is a life saver.

[@BookyWickey]

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

[@AccountingStuff]

Thanks! 😃

[@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!

[@shemmurray9208]

This video came out at the perfect time 👌🏾

[@AccountingStuff]

Haha, hope you find useful!

[@Moe_rezaei]

Best accounting channel :)

[@AccountingStuff]

Thanks mate!

[@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!

[@jenniferanthony1228]

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

[@AccountingStuff]

Hey Jennifer, thanks for your request!

[@johnq3543]

Thank you James... another good one !

[@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 ?

[@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

[@ravisonilal7054]

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

[@AccountingStuff]

Cheers Ravi, glad to hear it!

[@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]

facebook.com/AssignGuruu

[@agonlinetutor3700]

Very well explained James...

[@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.

[@vsevolodsyskin9107]

Awesome!

[@AccountingStuff]

Thanks!

[@ericilnga]

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 :)

[@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

[@kevinflynn5052]

Do the Allowance Method next!

[@AccountingStuff]

Thanks for your suggestion!

[@abdulwasi6001]

Love you sir ❤ from Afghanistan 🇦🇫

[@AccountingStuff]

Thanks Abdul! All the best

[@joejoerunya8908]

when I multiplied the 8.33% x $360,000, I got 29.998. I assume that you just rounded the number to $30,000? sorry if that's a dumb question lol

[@AccountingStuff]

Yes I rounded it :)

[@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!

[@somebye3sandiago623]

How to do find the depreciation like for 2 months or 3(less than a year?)

[@keiaracharles3268]

How is the residual value calculated ?

[@ImranKhan-sk4zt]

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

[@AccountingStuff]

Love from Canada! Stay safe!

[@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!

[@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!

[@ilmailmy1060]

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

[@AccountingStuff]

Thanks for your suggestion!

[@gagzs1660]

What if you don’t get the lifespan in the question?

[@JohnGrattafiori]

How do I journal or enter an assets residual value

[@zainbuddy]

Good to see you Love from Pakistan 🇵🇰

[@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.

[@cyacyan]

I have an account exam finals on Thursday and I feel like throwing up looking at these numbers lollll

[@AccountingStuff]

Good luck!!

[@fathiatubosun9200]

So your depreciation expense does not change when using straight line method?

[@AccountingStuff]

Hey Fathia, so long as you're comparing periods of equal length (e.g. year 1 vs year 2) then you're correct

[@BlackSwan77687]

An equipment was sold for Rs.250,000 having NBV of Rs.650,000 and bought four years ago. IT charges depreciation @10% per annum on straight line method. (Just need a little idea to solve it). If anyone could help.How i would find its ipening book value.?

[@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'

[@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!

[@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)

[@cookingwithkikababy7609]

I have to be honest. I enjoy your video's very much however I tried this formula and could never come up with the exact numbers as you did. The closest I was to being correct was I was $10 off.....I spent hours going over it till I finally gave up. I turned in my assignment however I advised my peers that I couldn't come up with the correct answer and if anyone had any suggestions on what I did incorrect. Thanks for the help but I never could get it EXACT as you did.

[@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.

[@emilymorel3583]

Hey did you rounded to 30,000 because my brain was having a stroke because I didn’t get 30,000 for depreciation expense. Also because is an estimate is okey to round?

[@lubnaabuasaker9537]

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

[@AccountingStuff]

Serendipity!

[@joshuadasilva8421]

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

[@AccountingStuff]

Cheers Joshua, thanks for your suggestion!

[@yasminjasmin6941]

My favorite teacher 😘

[@michaeladvincula7395]

Is there formula for residual value? How did you come up with 90000

[@Vlogsvibe320]

Why depreciation rate is fixed in straight line method plz tell the me but changes in reducing method

[@nouranalantably6242]

so i will keep 90,000 as fixed assets in my balance sheet at the end of the period as soon as I still using it after it is fully depreciated ..Right?

[@PROEKT_13]

i don't really get how residual value is calculated, can someone explain it using the example in the video pls )

[@dominickyalo9599]

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

[@KundanKundan-zi6db]

How would you get 30000 depreciable cost 8.33×360000=2988 🤔

[@premargowda]

Please show depreciation calculation when there is additional purchases in the mid year and the retirement costs.

[@stuiedaman]

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

[@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!

[@tsn665]

I was about to study but I'mma overthink bout his handsome face💀💀💀

[@alexethan7469]

👀

[@paulinak1817]

I swear this is a reducing balance method not straight line method I'm so confused

[@Deansanity]

Instead of doing 8.33% x 360000 cant you just do 360000 / 12 ?

[@lyricpackaging1115]

thank s

[@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!

[@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 ??

[@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

[@VA-jf5pb]

What happens is you can’t get the $90k after 12 years?

[@jenniegrafe1736]

What if something has no salvage value at the end of it's useful years?

[@thetourminator]

Is this IFRS or GAAP method ? Or are they the same?

[@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

[@andrewandal8000]

Flawless video as always full of new techniques

[@AccountingStuff]

Thanks Condura!

[@danyhawa8399]

Hi Can you please post a video about Amortization since it is linked to Depreciation somehow. thank you

[@AccountingStuff]

Hey Dany, cheers for your suggestion!

[@tiennguyenviet688]

hey! I wonder could you advise me a channel about probability and statistics similar like your channel

[@AccountingStuff]

Heya, unfortunately I don't know of any. There must be some good ones out there though. Good luck!

[@ashiq2305]

Is this also right way? Asset vale - residual vale ________________________ Useful Year 450000-90000 _______________ =30000 12

[@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!

[@clydonmicallef3509]

Hi, What is the formula used to have the 8.33%? thanks

[@clydonmicallef3509]

Ok solved ))

[@AccountingStuff]

@@clydonmicallef3509 Great, glad you got to the bottom of it

[@rahuldas6777]

nice of my prof to only use straight line depreciation

[@JohnGrattafiori]

Hello, do you have a video journaling fixed asset depreciation with salvage value?

[@AccountingStuff]

I cover the journals in this video: kzbin.info/www/bejne/laHEpGR7iceloJo

[@sweetpotatoes1955]

Thank u so much your videos are really really helpful

[@fortiemox]

how did you get the straight line depreciation rate ?

[@masudarrahman5016]

I watch your video in Bangladesh.

[@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

[@ravsangha13]

Hi, please can you do university style examples like how they have extra information within the notes of the questoin which arent in the trial balance and have you covered reducing balance depreciation, thankyou

[@AccountingStuff]

Thanks for your suggestion! I've covered the Double Declining Balance Method which is very similar to the Reducing Balance Method

[@evafacila1719]

Nice, James :D

[@AccountingStuff]

Thanks Eva

[@johnrafaellubarbio4338]

hello again.... can we depreciate by days? like june 15, 2012 to december 31, 2016........there's 15 days or 16 maybe.......is it part of depreciating...something?

[@AccountingStuff]

Yes you can :)

[@johnrafaellubarbio4338]

@@AccountingStuff thank you

[@AccountingStuff]

@@johnrafaellubarbio4338 You're welcome :)

[@andreeaferche769]

Hi James! I was wondering why do you use '20X0 ... and 20Y0 ...' ?

[@AccountingStuff]

Hey Andreea, I use them to refer to a non-specific year.

[@kalpesh8814]

hey brother, can you please make some summary videos on indian ca inter syllabus please

[@AccountingStuff]

Thanks for your request!

[@manalsajid2082]

how did you get 30,000 for 8.33% x 360,000? i am getting 29,988.

[@abdsing6345]

Ik I am like a year late to answer but it bc he simply rounded it off but it best not to do that if you want to be accurate to the dot Especially if it for an exams

[@stephenfreeman9048]

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

[@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

[@netflixobsessions3596]

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

[@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!

[@kiaram9949]

what if the residual value is not given?

[@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

[@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!)

[@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!

[@karenschulz5874]

Do you have a video on depreciation on sale of assets and how to work it out

[@AccountingStuff]

Hey Karen! Unfortunately I haven't covered the sale of assets yet. But thanks for your request :)

[@fateenkhan4317]

Is there a procedure to determine useful life and residual value?

[@isaacchirwa9785]

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