[FREE EPDF] AFM Exam | Depreciation Part 2 | JAIIB 2025

Ever got confused calculating depreciation after a method change or dealing with tough exam numericals? 😰 You’re not alone!

In this Part 2 of our Depreciation Masterclass, we go beyond the basics and unlock advanced methods used in real-world banking scenarios and frequently asked in JAIIB, CAIIB & CCP exams.

• ✅ WDV with salvage value
• ✅ Sum of Years Digit Method (SYD)
• ✅ Double Declining Balance Method (DDB)
• ✅ Change in depreciation method (SLM to WDV)
• ✅ Sinking Fund Concept
• ✅ Journal Entries & Real Exam Questions

This session is perfect for bankers, finance students, and JAIIB/CAIIB aspirants who want to ace accounting concepts with clarity.

👉 Watch the full video, drop your questions in the comments, and don’t forget to give it a thumbs up if it helps you!

🎬 Before we dive in, watch this video for a complete breakdown:

⏱️ Body (Complete Breakdown by Timestamps)

📍 00:59 – WDV Method with Salvage Value: 3-Year Numerical

This section explains both the direct and detailed WDV method:

• Cost: ₹2,00,000
• Salvage: ₹20,000
• Depreciation Rate: 20%

Quick Trick: Multiply by 80% thrice for WDV value and add salvage to finalize.

📍 04:46 – Accelerated Depreciation & Why It’s Needed

Heavy usage = higher value drop early on. Think of a new car’s depreciation – this logic is key to accelerated methods.

📍 05:22 – Sum of Years Digit Method (SYD): Concept & Example

Formula Hack: Add all digits of asset life. E.g., 6 years = 1+2+3+4+5+6 = 21

Depreciation = (Remaining Years / Total Sum) × (Asset Cost – Salvage Value)

Example: Year 1 = ₹25,714 | Year 2 = ₹21,428 | …

📍 11:48 – Double Declining Balance (DDB) Method

Combine SLM and WDV. If life = 8 years → SLM = 12.5% → DDB = 25%

• Year 1 = ₹62,500
• Year 2 = ₹46,875
• Year 3 = ₹35,156

📍 17:55 – Change in Method: SLM ➡️ WDV (Retrospective vs. Prospective)

Prospective Change: Affects only future entries
Retrospective Change: Affects both past & future + needs adjustment entry

Example: Purchase @ ₹5,00,000, sold @ ₹2,00,000, net loss = ₹1,94,875

📍 26:29 – Sinking Fund Concept & Annuities

Save depreciation annually in a fund earning 8% interest.

Annuity Types:

• Ordinary Annuity – Paid at year-end
• Annuity Due – Paid at year-start

📍 30:05 – Journal Entries & Accounting Standards

• Depreciation A/c Dr.
• To Asset A/c
• Then → Transfer to P&L A/c

[FREE EPDF] JAIIB AFM ENGLISH | Depreciation | Chapter 6 | Part 1

📍 32:14 – Final Numerical (SLM + Erection Cost + Scrap)

• Plant cost = ₹41,000, Erection = ₹4,000
• Scrap = ₹5,000, Life = 10 years
• Book Value = ₹45,000 – ₹5,000 = ₹40,000
• Yearly Dep = ₹4,000, After 3 Years = ₹33,000

📥 Download PDF Notes for This Video

Want all formulas, methods, and numericals in one PDF?

✅ Includes solved questions, formula charts & quick tricks

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✅ Conclusion

This session took your depreciation knowledge from basic to advanced – with WDV, SYD, DDB, method changes, and journal entries all explained.

Whether you’re preparing for JAIIB, CAIIB, CCP, or even finance interviews – you’re now ready to tackle any depreciation question like a pro.

Now it’s your turn:

• ✅ Practice the numericals discussed
• ✅ Comment your score or doubts
• ✅ Share with fellow aspirants

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Let’s keep learning together. Happy learning! 🎓