Hi,
My client requirement is calculation of salvage value.This is the scenario:
"The salvage value is calculated based on the principal class of the asset. It reduces the deprecation value of the asset under straight line method."
For example :-
Principal class-Motor Vehicles: Salvage value 10%
A vehicle value is SAR 100000 with useful life of 10 years. As per standard, the deprecation under straight line method is 10000 per annum for ten years.
Calculating the with salvage value for this asset with 10%, the asset value is reduced to 90000 from 100000.The depreciation is calculated on 90000 for 10 years.
The salvage value of 10000 is considered only for valuation of gain or loss at the time of retirement. There is no Accumulated depreciation and depreciation for the corresponding year on the remaining value 10000.
I request you to any help on this issue.
Thanks and regards,
Sivakumar.Subbiah