NDEJJE UNIVERSITY
FACULTY OF ENGINEERING AND SURVEY
DEPARTMENT OF CIVIL ENGINEERING
CIV 4104: QUANTITY SURVEYING II (ESTIMATION &
PROCUREMENT)
PREPARED BY GROUP TWO
S/N NAMES REG NUMBER
1 MIREMBE GLADYS 21/2/328/W/439
2 NAKAMOGA PHIONA 21/2/328/W/059
3 SSENGENDO JOSEPH 22/2/328/W/226
4 KIIZA MARTIN 22/2/328/W/180
5 NAMAWEJJE FARIDAH 21/2/328/W/312
6 KAVUMA MERCY 22/2/328/W/034
7 WATSABA BOSS 22/2/328/W/355
8 AHABWE JOSHUA 21/2/328/W/239
GROUP TWO 1
STRAIGHT LINE METHOD:
Straight line depreciation is a common method of depreciation where the value of a fixed
asset is reduced over its useful life. The depreciation value obtained is applied to the entire
useful life of the machine.
Depreciation = (Original Value - Residual Value)/Expected Life
Original value ($) = 3,500,000
Residual or salvage value ($) = 500,000
Expected life = 10 years
3,500,000 − 500,000
= 300,000
10
Year Depreciation ($) Net Book Value ($)
0 - 3,500,000
1 300,000 3,200,000
2 300,000 2,900,000
3 300,000 2,600,000
4 300,000 2,300,000
5 300,000 2,000,000
6 300,000 1,700,000
7 300,000 1,400,000
8 300,000 1,100,000
9 300,000 800,000
10 300,000 500,000
GROUP TWO 2
DOUBLE DECLINING BALANCE METHOD
The double-declining balance depreciation (DDB) method, also known as the reducing
balance method, is one of two common methods a business uses to account for the expense of
a long-lived asset. The double-declining balance depreciation method is an accelerated
depreciation method that counts as an expense more rapidly (when compared to straight-line
depreciation that uses the same amount of depreciation each year over an asset's useful life).
Similarly, compared to the standard declining balance method, the double-declining method
depreciates assets twice as quickly.
DOUBLE - DECLINING METHOD
CUMMULATIV
YEAR BEGINNIN END BOOK
DOUBLE DEPRECIATIO E
S G BOOK VALUE
DECLININ N VALUE DEPRECIATIO
VALUE
G RATE N VALUE
0 3,500,000
1 3,500,000 0.2 700,000 700,000 2,800,000
2 2,800,000 0.2 560,000 1,260,000 2,240,000
3 2,240,000 0.2 448,000 1,708,000 1,792,000
4 1,792,000 0.2 358,400 2,066,400 1,433,600
5 1,433,600 0.2 286,720 2,353,120 1,146,880
6 1,146,880 0.2 229,376 2,582,496 917,504
7 917,504 0.2 183,501 2,765,997 734,003
8 734,003 0.2 146,801 2,912,797 587,203
9 587,203 0.2 87,203 3,000,000 500,000
10 500,000 0 - - 500,000
3,000,000
NOTE: The depreciation value ends at the ninth year because at the tenth year the machine
depreciation value is already below the salvage value.
GROUP TWO 3
SINKING FUND METHOD
The sinking fund strategy is a depreciation technique for an asset, thus producing enough
money to replace it at the end of its useful life.
The sinking fund method allocates equal depreciation to the entire life of the plant which
is not practical since the equipment may not be able produce much in the later years due
to tear and wear.
𝑃(1 + 𝑖)𝑛
[ ]𝑖
(1 + 𝑖)𝑛 − 1
P= 3,500,000
I = 10%
n = 10,9,8,7,6,5,4,3,2,1
3500000(1 + 0.1)10
[ ] ∗ 0.1 = 569,608.882
(1 + 0.1)10 − 1
GROUP TWO 4
SUM- OF – YEARS- DIGITS METHOD
The digit numbers representing each year of operation of the plant are added together.
The depreciation charge for each year is taken as the depreciable sum multiplied by the
ratio of the reverse year’s number to the total added digits.
SUM OF YEARS DIGITS METHOD
YEARS 55
INITIAL COST ($) 3,500,000
SALVAGE VALUE ($) 500,000
NUMBER OF YEARS 10
DEPRECIATION sum (INITIAL COST- SALVAGE) 3,000,000
Book value at the beginning of 11th 500,000
year
DEPRECIATION ® IN depreciation Calculation Book Value
EACH YEAR
YEAR 1 545,455 350,0000 − 545,455
10
*3,000,000
55
Book value at the
beginning of 2nd year 2,954,545
YEAR 2 490,909 2,954,545 − 490,909
9
*3,000,000
55
Book value at the
beginning of 3rd year 2,463,636
YEAR 3 436,364 2,463,636 - 436,364
8
*3,000,000
55
Book value at the
beginning of 4th year 2,027,273
YEAR 4 381,818 2,027,273 - 381,818
7
*3,000,000
55
Book value at the
beginning of 5th year 1,645,455
YEAR 5 327,273 1,645,455 - 327,273
6
*3,000,000
55
Book value at the
beginning of 6th year 1,318,182
GROUP TWO 5
YEAR 6 272,727 1,318,182 - 272,727
5
*3,000,000
55
Book value at the
beginning of 7th year 1,045,455
YEAR 7 218,182 1,045,455 - 218,182
4
*3,000,000
55
Book value at the
beginning of 8th year 827,273
YEAR 8 827,273 - 163,636
3 163,636
*3,000,000
55
Book value at the
beginning of 9th year 663,636
YEAR 9 109,091 663,636 - 109,091
2
*3,000,000
55
Book value at the
beginning of 10th year 554,545
YEAR 10 54,545 554,545 - 54,545
1
*3,000,000
55
Book Value at the 500,000
beginning of the 11 year
GROUP TWO 6
