ocr: Introduction We can now look at how this depreciation chargeis calculated for this particular company. There are two types of fixed asset being utilised within the pusiness: 1. Premises 2. Plant and Machinery In the previous wvorked example, we were told that the company's policyis to provide depreciation of4% on its premises, and 20%. on its plant and nachinery. This is known as Straight-line Depreciation, since its effect is to allocate the cost oft the tixed assets over their estimated usetul economic lives in equal instalments.
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