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
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.
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.
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!!
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.
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 )
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.
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.
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.
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.
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!
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!
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!!
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!)
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
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.
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.
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?
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.
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.
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 ?
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.
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!
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
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
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.
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 ??
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?
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.
