Domestic Corporation, DOS, Disk Operating System, Double Declining Balance




Domestic Corporation, DOS, Disk Operating System, Double Declining Balance :




Domestic Corporation : A local corporation that operates in the range of the area in which it is incorporated



DOS = Disk Operating System : An operating system is a programme that controls all of the basic operations of the computer



Double Declining Balance : A system of accelerated depreciation that, for tax purposes, allows a larger deduction in the earliest years : The declining balance method allows depreciation at twice the straight line rate on the book value of the asset for each year until salvage value is reached. For example, a van purchased for $ 20,000 is expected to last five years with a salvage value of $ 5,000 at the end of five years. An asset with a five year life is depreciated at 20%, but declining balance allows twice that or 40%. Therefore, the first year, $ 8,000 is claimed for depreciation leaving a book value of $ 12,000. The second year, $ 4,800 is claimed - 40% times $ 12,000 - leaving a book value of $ $7,200. The third year depreciation is calculated at $2,880, but only 2,200 is allowed because the book value cannot fail below the salvage value of $ 5,000.




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