The term "written down value" typically refers to the
depreciation or reduction in value of an asset over time. It is commonly used
in accounting and finance to calculate the value of an asset after accounting
for depreciation.
When an asset is purchased, its initial value is recorded on the balance sheet. However, as the asset is used or becomes older, it tends to lose value due to wear and tear, obsolescence, or other factors. The written down value is the remaining value of the asset after accounting for this depreciation.
The written down value can be calculated using various
depreciation methods, such as straight-line depreciation or reducing balance depreciation. Straight-line depreciation allocates an equal amount of depreciation expense over the useful life of the asset, while reducing balance depreciation applies a higher depreciation expense in the early years andreduces it over time.
To calculate the written down value of an asset using straight-line depreciation, you subtract the accumulated depreciation from the initial cost of the asset. The accumulated depreciation is the total depreciation expense recorded for the asset up to a specific point in time.
For example,
let's say you purchased a computer for $1,500, and you estimated its useful life as five years. Using straight-line depreciation, you would allocate $300 of depreciation expense ($1,500 divided by 5) each year. After three years, the accumulated depreciation would be $900 ($300multiplied by 3). Therefore, the written down value of the computer after three
years would be $600 ($1,500 minus $900).
It's important to note that the written down value is an accounting measure and may not reflect the actual market value of an asset.Market conditions, supply and demand, and other factors can impact the value of an asset beyond its written down value.
Wimax Company limited
Calculation
of Written down value
Year-2021
Opening
cost (as on 1 July-2021)
xxxx
Add: Addition
(Purchase)
xxxx
(Less):
Adjustment on loss on fire (xxxx)
Total cost as on 30 June-2022
xxxx
(Less) Accu -depreciation (July-01-2021) (xxxx)
Depreciable
value as on (July-01, 2021) xxxx
So,
Depreciation Expense during the Year (2022)
Depreciable
value *Depreciation rate = xxxx
Now we calculate Total
depreciation expense-
Accu
-depreciation (July-01-2021) (xxxx)
Add: Depreciation Expense during the Year (2022)
xxxx
Total depreciation as on 30 june-2022 xxxx
Now we calculate Written
down value:-
Total
cost as on 30 June-2022
xxxx
Less: Total depreciation as on 30 June-2022 xxxx
Written down value as on 30 June-2022 xxxx