Question

Why there are two different methods of calculating depriciation ?

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Answer 1

Answer: There are two types of calculating depreciation

First one is Fixed Installment Method and second is Diminishing Balance Method or Reducing Balance Method.  

Explanation: In Fixed Installment method we apply a depreciation every year on the actual price of fix asset. In Diminishing Balance Method or Reducing Balance Method on the first year we apply a depreciation on the actual price of fixed asset. On the second year we apply a depreciation on the balance which is carried down and every year we do same process for calculating depreciation.