Legal Dictionary of Pakistan
Quick lookup for English, Urdu, and Latin legal terms used in Pakistani jurisprudence.
accelerated depreciation method
A depreciation method that yields larger deductions in the earlier years of an asset's life and smaller deductions in the later years.
accelerated depreciation method.
See DEPRECIATION METHOD
annuity depreciation method
A depreciation method that allows for a return of imputed interest on the undepreciated balance of an asset's value. ( The imputed interest is subtracted from the current depreciation amount before it is credited to the accumulated depreciation accounts.
declining-balance depreciation method
A method of computing the annual depreciation allowance by multiplying the asset's undepreciated cost each year by a uniform rate that may not exceed double the straight-line rate or 150 percent.
depreciation method
A set formula used in estimating an asset's use, wear, or obsolescence over the asset's useful life. ( This method is useful in calculating the allowable annual tax deduction for depreciation. See USEFUL LIFE.
double-declining depreciation method
A depreciation method that spreads over time the initial cost of a capital asset by deducting in each period twice the percentage recognized by the straight-line method and applying that double percentage to the undepreciated balance existing at the start of each period.
replacement-cost depreciation method
See DEPRECIATION METHOD. replacement insurance See INSURANCE.
sinking-fund depreciation method
A depreciation method that accounts for the time value of money by setting up a depreciationreserve account that earns interest, resulting in a gradual yearly increase in the depreciation deduction.
straight-line depreciation method
A depreciation method that writes off the cost or other basis of the asset by deducting the expected salvage value from the initial cost of the capital asset, and dividing the difference by the asset's estimated useful life.
sum-of-the-years'-digits depreciation method
A method of calculating the annual depreciation allowance by multiplying the depreciable cost basis (cost minus salvage value) by a constantly decreasing fraction, which is represented by the remaining years of useful life at the beginning of each year divided by the total number of years of useful life at the time of acquisition. - Sometimes shortened to SYD method.
unit depreciation method
See DEPRECIATION METHOD.
units-of-output depreciation method
A method by which the cost of a depreciable asset, minus salvage value, is allocated to the accounting periods benefited based on output (as miles, hours, number of times used, and the like).