0
Think along the lines of Compound Interest (but in reverse)
For example- Asset of 100 depreciating by 20% p.a
On Straight Line
Year1 Asset 100 Depreciation 20
Year2 Asset 80 Depreciation 20
Year3 Asset 60 Depreciation 20
Year4 Asset 40 Depreciation 20
Year5 Asset 20 Depreciation 20
Year6 Asset 0
On Diminishing Balance
Year1 Asset 100 Depreciation 20
Year2 Asset 80 Depreciation 16
Year3 Asset 64 Depreciation 12.8
Year4 Asset 51.2 Depreciation 10.24
Year5 Asset 40.96 Depreciation 8.192
Year6 Asset 32.77
.... and so on until the asset tends to 0 (will never technically reach 0)
What else can I help you with?
How many methods of calculating depreciation?
Following are different methods of depreciation: 1 - Straight line method 2 - Diminishing balance method 3 - Double declining method 4 - Sum of years method 5 - MACRS
Credit card balance method that subtracts payments and credits in this month from balance at end of last month is?
Adjusted Balance Method
When is the reducing balance method more suitable than the straightline method?
in what circumstances is the reducing balance method more appropriate than the straight line method?
Which method for calculating a credit card balance does not take into account the purchases or the payments made during the current billing cycle?
Adjusted balance method APEX
What is the previous balance method?
calculates the interest you owe for your balance at the end of the previous billing period
What are the depreciations methods?
two methods: Cost method and diminishing balance method
What is the distinction between straight line balance method and diminishing balance method?
Straight line method is the method in which asset cost is equally distributed over the entire life of asset and hence the amount of depreciation remain same for every month till salvage value. Under diminishing line method depreciation is charged on diminishing balance of asset every year for the life of asset and the amount remain at the end of life of asset is the salvage value.
Diminishing balance method of deprecation in the financial statements be more conservative or less conservative than the current practice of using the 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.
How many methods of calculating depreciation?
Following are different methods of depreciation: 1 - Straight line method 2 - Diminishing balance method 3 - Double declining method 4 - Sum of years method 5 - MACRS
What is the projected balance sheet method?
projected balance sheet method
Credit card balance method that subtracts payments and credits in this month from balance at end of last month is?
Adjusted Balance Method
When is the reducing balance method more suitable than the straightline method?
in what circumstances is the reducing balance method more appropriate than the straight line method?
Which method for calculating a credit card balance takes into account both the purchases and the payments made during the current billing cycle?
Average Daily Balance Method
What method of calculating finance charge results in the lowest finance charge?
The method of calculating finance charges that typically results in the lowest finance charge is the Average Daily Balance method. This approach considers the daily balance of the account over the billing cycle, allowing for fluctuations in the balance to be averaged out, which can lead to a lower overall finance charge compared to methods like the Previous Balance method or the Adjusted Balance method. By minimizing the balance used in calculations, the Average Daily Balance method can reduce the finance charge incurred.
Which method for calculating a credit card balance does not take into account the purchases or the payments made during the current billing cycle?
Adjusted balance method APEX
Which interest method do credit card companies prefer?
The interest method that credit card companies prefer will vary depending on the company. In most cases, they use the average daily balance method or the daily balance method.
What is the statutory percentage method formula?
same as double declining balance method, 200%
