WDV Abbreviation

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Popular abbreviations of WDV:

Searching for WDV abbreviation / WDV full form leads to different results in different categories. The below table illustrates the popular acronyms among them.

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What does WDV mean?

Written-Down Value is the method to ascertain the value of an asset after depreciation. It helps the business find the net worth of the asset at the end of each year.

The businesses use either depreciation or amortization methods. The depreciation method applies to physical, tangible assets, while amortization is used to find the value of intangible assets like goodwill and patents.

Calculating WDV

Organizations may need the WDV on the assets with high depreciation value or require high maintenance. This value reflects on the balance sheet.

The business needs to know the opening balance in the balance sheet of an asset and the depreciation expense at the rate for the fixed assets to find the exact value.

Formula

WDV = (Cost of Asset – Salvage Value of the Asset) * Percentage of the rate of depreciation

Features

• It shows the current value of assets.
• The WDV helps in getting the final pricing at the time of selling the product.
• The business can know the exact value by subtracting the amortization or depreciation from the original value.

Advantages

• It helps find the exact price of the asset that has to be liquidated.
• It helps in determining the market value of the asset.
• It helps in business to know when the technology has become obsolete.
• The Income Tax Act has given recognition to this method to find the book value.

Disadvantages

• Short life span assets are not covered under this method.
• Getting the depreciation rate is not easy, and it takes a reasonable time to reach the asset at its scrap value.