Grade 11 Accounting Term 1 Fixed assets | Notes No 3 Tangible Assets | Property plant and Equipment

The video begins by explaining how to record the opening balances for vehicles and accumulated depreciation from the books of Jorge Traders on March 1, 2015. It demonstrates how to calculate the initial carrying value by subtracting accumulated depreciation from the cost price. The fiscal year ends on February 29, 2016.

A new vehicle purchased on August 1, 2015, for 200,000 is recorded as an additional asset. The instructor emphasizes that additions are positive values, while disposals and depreciation are indicated with brackets (negative values).

The video highlights that depreciation is calculated at 20% per annum using the diminishing balance method. This method requires subtracting accumulated depreciation from the cost price before applying the depreciation rate. It then walks through the calculation of depreciation for a vehicle sold on August 31, 2015, ensuring the depreciation is updated until the disposal date.

The instructor explains how to calculate the total depreciation for the period. This includes the depreciation on the disposed vehicle (up to the sale date), depreciation on the newly purchased vehicle (from purchase date to year-end), and depreciation on the remaining vehicles (after removing the disposed asset and its accumulated depreciation).

The video concludes by demonstrating how to calculate the closing balances for cost, accumulated depreciation, and carrying value. This involves starting with opening balances, adding additions, subtracting disposals, and incorporating the total calculated depreciation for accumulated depreciation. The final carrying value is then verified by subtracting the closing accumulated depreciation from the closing cost.