Depreciation is the reduction in the value of assets over time due to wear and tear, obsolescence, or any other reason. It is an essential aspect of accounting as it helps to allocate the cost of an asset over its useful life.

In this case, we have a machine worth Rs.490,740, and we need to calculate its depreciation at 15% of its opening value each year until its value is reduced by 90%.



To calculate the depreciation of the machine, we need to use the straight-line method. This method assumes that the asset depreciates at a constant rate over its useful life. The formula for calculating depreciation using this method is:

Depreciation expense = (Cost of asset – Salvage value) / Useful life

In this case, the cost of the machine is Rs.490,740, and we assume that its useful life is 5 years. The salvage value of the machine is not given, so we assume it to be zero.

Therefore, the annual depreciation expense of the machine would be:

Depreciation expense = (490,740 – 0) / 5 = 98,148

This means that the machine would depreciate by Rs.98,148 each year.



After 5 years, the value of the machine would be:

Value of machine = Cost of asset – Total depreciation expense

Total depreciation expense = Depreciation expense x Number of years

Total depreciation expense = 98,148 x 5 = 490,740

Value of machine = 490,740 – 490,740 = 0

This means that after 5 years, the value of the machine would be zero.



We need to find out after how many years the value of the machine would be reduced by 90%. To do this, we can use the following formula:

Value of machine after n years = Cost of asset – (Depreciation expense x n)

90% of the value of the machine = 0.9 x 490,740 = 441,666

441,666 = 490,740 – (98,148 x n)

n = 5 – (441,666 / 98,148) = 0.5 years

Therefore, the value of the machine would be reduced by 90% after 5.5 years.



In conclusion, the machine worth Rs.490,740 would depreciate by Rs.98,148 each year using the straight-line method. After 5 years, its value would be zero. The value of the machine would be reduced by 90% after 5.5 years.