Depreciation and assets, from purchase to disposal.
Learn how fixed assets are recorded and depreciated, from straight line and diminishing balance methods to acquisition, disposal, impairment, and revaluation.
Course overview
Depreciation is the systematic allocation of the cost of a fixed asset over its useful life. This course explains how assets are classified, how depreciation is calculated and recorded, and what happens when assets are bought, sold, impaired, or revalued.
- Understand what depreciation is, and why it is charged
- Identify the types of assets, including fixed, current, tangible, and intangible
- Compare depreciation methods and when each is suitable
- Calculate depreciation using the straight line, diminishing balance, and units of production methods
- Record fixed asset purchases, and pass entries for depreciation
- Account for the sale or disposal of an asset, and calculate profit or loss
- Understand accumulated depreciation and net book value
- Learn impairment and revaluation, and solve practical problems
Depreciation and Assets lessons
Follow the lessons in order, or search and filter to jump to a subject.
Introduction to Depreciation
Learn what depreciation is and why assets lose value over time.
Types of Assets
Explore fixed, current, tangible, and intangible assets.
Depreciation Methods
Get an overview of the main ways to charge depreciation.
Straight Line Method
Charge equal depreciation each year over the asset's life.
Diminishing Balance Method
Charge a fixed rate on the reducing book value of the asset.
Units of Production Method
Base depreciation on how much the asset is actually used.
Depreciation Calculation
Work through depreciation numerically, including part-year cases.
Fixed Assets Accounting
Learn how fixed assets are recorded and shown in the books.
Asset Acquisition and Disposal
Record the purchase, sale, or scrapping of an asset.
Accumulated Depreciation
Understand the provision account and net book value.
Impairment and Revaluation of Assets
See how asset values are written down or revised.
Practical Problems
Practise numerical problems on depreciation and assets.
Learn how assets lose value, then how to record it.
The lessons start with depreciation and asset types, move through the three main methods, then cover fixed asset accounting, disposal, impairment, revaluation, and practice problems.