It ignores variations in the rate of asset use.
Accelerated depreciation is method in which double rate for depreciation is used as compare to straight line method.
Straight line depreciation method is that method in which fixed amount of depreciation is charged to all fiscal years in which that asset is used.
in what circumstances is the reducing balance method more appropriate than the straight line method?
MT and MSL are two depreciation methods used in accounting. They are based on the linear method of depreciation.
The formula for a straight line depreciation method is the Cost minus the Salvage Value over the Life in Number of Periods which will equal Depreciation.
different deprecition method impact differently on the company's profit. The straightline method of depreciation when used impact differently on the profit and loss than the reducing balance method. How do the two methods differ. different deprecition method impact differently on the company's profit. The straightline method of depreciation when used impact differently on the profit and loss than the reducing balance method. How do the two methods differ.
Accelerated depreciation is method in which double rate for depreciation is used as compare to straight line method.
The diminishing balance method of depreciation is generally considered less conservative than the straight-line method as it results in higher depreciation expenses in the earlier years of an asset's life. This reflects a more aggressive approach in recognizing depreciation compared to the straight-line method, which spreads depreciation evenly over the useful life of the asset.
Straight line depreciation method is that method in which fixed amount of depreciation is charged to all fiscal years in which that asset is used.
Straight line depreciation method is that method in which fixed amount of depreciation is charged to all fiscal years in which that asset is used.
in what circumstances is the reducing balance method more appropriate than the straight line method?
MT and MSL are two depreciation methods used in accounting. They are based on the linear method of depreciation.
straight line method
Under straight line depreciation, fixed amount of depreciation is charged to every year while in declining balance method depreciation percentage remains same but depreciation is charged on remaining balance of asset due to which the amount of depreciation is different in every year.
http://en.wikipedia.org/wiki/Depreciation#Straight-line_depreciation
The formula for a straight line depreciation method is the Cost minus the Salvage Value over the Life in Number of Periods which will equal Depreciation.
the straight line method