Wednesday, May 8, 2019

Reporting results Essay Example | Topics and Well Written Essays - 250 words - 1

Reporting results - Essay idealIt is important for ecesiss to make such adjustments in order to provide an accurate position of the firm in respect to assets.In order to determine the depreciation set down on a given asset, an organization has to establish the initial cost of the asset, its oblige value, and the period taken for the value to depreciate from the cost to the book value. Nevertheless, if a firm knows the lifespan of an asset and the residual value, then calculations of depreciation of expense may be calculated. For instance, if a firm bought an asset for $50,000 and the expected lifespan and residual values are 10 long time and $10,000 respectively, then the organization may use the straight line method to calculate depreciation expense as $4,000. Therefore, even though accurate stating of an organizations financial position requires that the book or current value of an asset to be established, it is does not lead to a serious challenge in calculating the depreciati on expense given the straight line method (Finkler, 2010). The straight line excogitation can be used in such scenarios where the cost, residual value, and the lifespan are required.From the explanations, it is evident that the difficultness in determining the current value of an asset does not create a significant a problem in determining the depreciation expense that should be charged for a

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