Depreciation Calculations for Financial Accounting

Depreciation Calculations for Financial Accounting

Course Overview

A beginner’s guide on depreciation in quick lectures with Excel spreadsheets. Never sweat the depreciation chapters again. Breeze through depreciation problems. Real-world type example company for learning. You will know understand depreciation, how to calculate it and have tools you can take with you.

Learn which assets need to be depreciated for financial reporting. Learn how to calculate Straight Line, Declining Balance, Sum of the Years Digit, and Activity Methods. Get Excel templates for these methods while learning to use Excel to do the calculations.

Who will benefit from this course?

If you are a beginning level accounting student that wants to develop a better understanding of depreciation then you are perfect for this course. Also, bookkeepers or entrepreneurs that need to depreciate your venture you will be find this course an excellent resource. Students should already have a basic understanding of the accounting cycle.

What you will learn

A beginner will learn depreciation for accounting in short, direct, lectures. These lectures will use real world example businesses.

Lesson Descriptions

· What assets are depreciated? In this lesson you will learn what is an asset and how assets differ between long lived and other assets. This is important because without understanding the nature of assets it is difficult to understand what depreciation is all about.

· The relationship between the balance sheet and income statement. In this lesson you get a discussion of how an income statement only expenses what has occurred in that time period. Since long lived assets are used for many time periods, you only want to include a portion of the asset that was used up for the time period that the income statement covers. The balance sheet has your assets while the income statement includes expenses. The balance sheet shows you what is available and the income statement helps see what profit was made during a time period. As assets are used up on the balance sheet that using up cause an expense.

· What is depreciation expense vs accumulated depreciation? As you use up the asset, you will have an expense called depreciation. That expense only shows up in the income statement made for that time period. As depreciation whittles away at the asset the depreciation grows or accumulates thus accumulated depreciation.

· You’ll learn the debits and credits during this lesson. You will learn how to put the depreciation activity in the books using a journal entry. Once the journal entry is completed you can determine the assets book value.

· Did you know there are multiple methods of depreciation? There are different methods from which managers have to choose. The differences are only timing differences since at the end of the asset’s useful life the asset will always depreciate down to the salvage value. You will get a discussion of what ‘salvage value’ means in accounting.

· Straight-line depreciation: How to calculate Straight line depreciation using an example business and Excel template.

· Declining balance method: How to calculate declining balance method for depreciation using an example business and Excel template.

· Sum of the years digit depreciation: How to calculate the sum of the years digit depreciation using an example business and Excel template.

· Activity method How to calculate activity method depreciation using an example business and Excel template.

· You will get a comparison of these methods and why managers may choose one over the other.

· Bonus: Advanced topic in depreciation is covered. You will learn how to apply the straight-line test to the declining balance method.

· Templates! You will get Excel templates that you can use after the course. Each template has a video tutorial. You can use these to help with textbook problems or with real-world assets.

Course Prerequisites:

Students should have a basic understanding of accounting or the accounting cycle.

Focused depreciation lectures explained using Excel. All depreciation methods taught and Excel templates provided.

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What you will learn

• Accounting students will understand depreciation as is pertains to accounting.
• Students learn how to use Excel to calculate depreciation and get Excel templates for future use.
• Students will learn different methods to calculate depreciation for financial statements.

Rating: 4.5625

Level: Beginner Level

Duration: 1 hour

Instructor: Eric Knight, DBA, CPA