The calculation of the residual value


Calculating the residual value of a good is very simple since it will be necessary to withdraw the accumulated depreciation amount at the purchase price. For best accountancy training Best school of accountancy In Lahore. Obviously, in order to do this, the accounting firm will have to have depreciation schedules in order to know what rate of depreciation to apply to each asset since not all of them lose value at the same rate.
It is considered, for example, that bedding does not lose value after being used one year while a computer loses 20% or a video game 40% after the same duration of use.
The latter is also widely used in the insurance sector since compensation is based on the residual value of the asset. In other words, if your refrigerator, purchased 5 years earlier, is drowned following a flood, the insurance will compensate you on the basis of the residual value of the property, ie the value before the disaster. It will therefore apply a depreciation rate to the purchase price of your refrigerator that is supposed to correspond to the years of use.
Accounting for ancillary costs
The acquisition of a real estate complex is also accompanied by various charges which must be recorded in the accounts.
Transfer taxes, agency and notary fees, brokerage commissions and transaction fees can either be included in the acquisition cost to be broken down between all categories or be recognized as expenses.
On the other hand, the acquisition of furniture or a door step, for example, must be recorded in their usual fixed assets accounts.

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