Finance Formulas / July 6, 2018 / Cecelia Weiss
The depreciable value of your fixed asset is based on the amount you pay for it minus the amount you'd earn selling it for scrap at the end of the depreciation period. Start with the initial cost, or the amount you paid. Subtract the salvage value that you anticipate being able to earn back at the end of the item's useful life.
The main thing to understand in managerial accounting is the difference between revenues and profits. Not all revenues result in profits for the company. Many products cost more to make than the revenues they generate. Since the expenses are greater than the revenues, these products great a loss—not a profit.
We Also Think You’ll Like