What is differences between SLM and wdm

This question was asked in Depreciation Entries for Companies

Yashu Sharma

Jan. 9, 2017, 4:53 p.m.

Answers!

Davneet Singh

Jan. 11, 2017, 6:48 p.m.

Hi Yashu

In SLM Method,(Straight Line Method)

Dep is calculated at Original Value

Example

If asset Value is 500000, and depreciation rate is 10%. Calculate depreciation for next 10 years using SLM Method

Year	Opening value	Depreciation (10% of original value)	Value after depreciation (Opening value - Depreciation)
1	500000	50000	450000
2	450000	50000	400000
3	400000	50000	350000
4	350000	50000	300000
5	300000	50000	250000
6	250000	50000	200000
7	200000	50000	150000
8	150000	50000	100000
9	100000	50000	50000
10	50000	50000	0

In WDV Method (Written Down Value Method)

,Dep is calculated at Opening Value of that Year

If asset Value is 500000, and depreciation rate is 10%. Calculate depreciation for next 10 years using WDV Method

Year	Opening value	Depreciation (10% of opening value)	Value after depreciation (Opening Value - Depreciation)
1	500000	50000	450000
2	450000	45000	405000
3	405000	40500	364500
4	364500	36450	328050
5	328050	32805	295245
6	295245	29525	265721
7	265721	26572	239148
8	239148	23915	215234
9	215234	21523	193710
10	193710	19371	174339

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