Accounting Book Depreciation Calculator (IAS 16)
Generates annual and monthly book depreciation schedules across Straight-Line, Reducing Balance, and Units of Production methods with salvage values and Net Book Value (NBV).
Computational Framework & Statutory Formulas
Annual Depreciation = (Asset Cost - Residual Value) / Useful Economic Life (Years)
Year n Expense = Net Book Value at Start of Year × Depreciation Rate (%)
Period Expense = [(Cost - Salvage Value) / Total Expected Units] × Units Produced in Period
Nigerian Economic & Statutory Context
Under IAS 16, Nigerian companies must establish accounting depreciation policies that reflect the true economic consumption of an asset. While book depreciation is reported in the Audited Financial Statements, it must be added back in the tax return and replaced with Capital Allowances under CITA Second Schedule.
Frequently Asked Questions (FAQ)
How does accounting depreciation differ from capital allowance in Nigeria?
Accounting depreciation (IAS 16) is determined by management policy based on estimated asset life and is charged in financial statements. Capital Allowance is a statutory tax deduction determined strictly by legislated rates under the Companies Income Tax Act (CITA) Second Schedule.
When should a company review an asset’s residual value and useful life under IAS 16?
IAS 16 mandates that the residual value and useful life of an asset must be reviewed at least at each financial year-end. If expectations differ from previous estimates, the change is accounted for as a change in accounting estimate under IAS 8.