Machine Hour, Production Units & Depletion Method | Depreciation Part 3 | CA Foundation

Описание: ⚙️⛏️ Depreciation – Usage Based & Depletion Methods (Part 3)



In this video, we revise three important depreciation methods that are frequently tested in CA Foundation exams and are based on usage or extraction, not time.



⚙️ Machine Hour Method
🔹 Depreciation is charged based on total hours the machine is used.
✔️ Best when wear and tear depends on machine running time


📌 Formula:
Depreciation per hour = (Cost – Scrap Value) ÷ Total estimated hours



📦 Production Units Method
🔹 Depreciation is charged based on units produced.
✔️ Suitable when output varies each year
📌 Formula:
Depreciation per unit = (Cost – Scrap Value) ÷ Total estimated units




⛏️ Depletion Method
🔹 Used for wasting assets like mines, quarries, oil wells, etc.
✔️ Charged based on quantity extracted
📌 Formula:
Depletion per unit = (Cost – Residual value) ÷ Total estimated units



📝 In this lecture, you will get:
✅ Simple explanation of all three methods
✅ Numerical problems as per ICAI pattern
✅ Comparison for quick revision
✅ Important exam tips for CA Foundation



🎯 One video = complete clarity + fast revision!


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