In this episode of Debit, Credit, Done!, Dean Quartermaine takes a deep dive into depreciation — what it is, why it’s used, and exactly how to calculate it using straight-line and reducing balance methods.
You’ll learn about residual value, why AAT often refers to carrying amount instead of net book value, and how to handle pro-rata depreciation when assets are bought or sold mid-year.
Includes:
Clear explanations of straight-line and reducing balance methods
How residual value affects your calculations
Posting depreciation in the accounts
A full worked example combining methods and pro-rata
Dean’s top exam tips for avoiding common mistakes
Perfect for AAT Level 3 students preparing for Financial Accounting: Preparing Financial Statements, and anyone who wants to finally “get” depreciation.
🎯 Challenge task included at the end to test your skills.
🎧 Listen now and master one of the most tested topics in AAT accounting.