What is the Disadvantages of straight line depreciation?

Answer 1

It assumes that the fixed asset gives the same service or is used for the same amount of frequency each year.

For some assets, we use it more in the first few years when it's brand-new and use it less as it gets older and less efficient etc. Sometimes when business is very good, we will use it very often, while if economy is bad like now we use it less.

In other words,

1. It does not take into consideration the expenses of repairs and maintenance of the asset

2. It does not provide funds for replacement of the asset.

3. It does not take into consideration the effective use of the asset.

4. It becomes difficult to calculate depreciation on additions made during a year.