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The reducing balance method allows for accelerated depreciation, meaning larger deductions in the earlier years of an asset's life, which can improve cash flow and tax benefits for businesses. However, a disadvantage is that it may not accurately reflect the actual usage or wear and tear of the asset over time, potentially leading to misrepresentation of financial performance. Additionally, this method can complicate financial reporting and forecasting due to fluctuating expenses.
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What are the advantages and disadvantages of the rise and fall method in surveying?
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What are the advantages and disadvantages of deductive method?
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Two advantages and disadvantages of creaming method?
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