which concept suggest that depriation is to be charged with the same method year after year
Answers
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Learn or solve with Pen and Paper. The best way to learn any answer is to read it and then write it down in a paper. ...Learn or solve by relating answers with daily life examples. Only if you can do this properly, you can feel how easy it will be to learn.
Learn or solve with Pen and Paper. The best way to learn any answer is to read it and then write it down in a paper. ...Learn or solve by relating answers with daily life examples. Only if you can do this properly, you can feel how easy it will be to learn. you will definately get your answer if you focus and remember these points
Explanation:
Units-of-production Straight-line Double-declining-balance All produce the same depreciation in the first year.
There are three methods for depreciation: straight line, declining balance, sum-of-the-years' digits, and units of production.
Straight-Line Depreciation
The straight-line method determines the estimated salvage value (scrap value) of an asset at the end of its life and then subtracts that value from its original cost. The difference is the value that is lost over time during the asset's productive use. That difference is also the total amount of depreciation that must be expensed.
Declining Balance Depreciation
The declining balance method is a type of accelerated depreciation used to write off depreciation costs more quickly and minimize tax exposure. With the declining balance method, management expenses depreciate at an accelerated rate rather than evenly over a scheduled number of years. This method is often used if an asset is expected to have greater utility in its earlier years. This method also helps to create a larger realized gain when the asset is actually sold. Some companies may also use the double-declining balance method, which is an even more aggressive depreciation method for early expense management.
Sum-of-the-Years' Digits Depreciation
The sum-of-the-years' digits method offers a depreciation rate that accelerates more than the straight-line method but less than the declining balance method. Annual depreciation is separated into fractions using the number of years of the business asset's useful life. Such assets may include buildings, machinery, furniture, equipment, vehicles, and electronics.
To cite an example, consider an asset with a useful life of five years, which will have a sum-of-the-years value of 15 (5 + 4 + 3 + 2 + 1). The first year is assigned a value of 5, the second year value of 4, and so on. The depreciation rate for the first year is the straight-line value multiplied by the first year's fraction (5 ÷ 15, or one-third).
Sometimes called the “SYD” method, this approach is also more appropriate than the straight-line depreciation model if an asset depreciates more quickly or has greater production capacity during its earlier years