Depreciation Essay

Depreciation Essay A method of speed up dispraise, in which double the straight-line wear and tear amount is taken the first year and then that same percentage, is applied to the un-depreciated amount in subsequent years is called double-declining- remnant-method. Depreciation methods that provide a higher depreciation charge in the first year of an assets life and gradually lessen charges in subsequent years are called accelerated depreciation methods.This whitethorn be a more realistic reflection of an assets actual expected benefit from the use of the asset, which many assets are virtually useful when they are new. One popular accelerated method is the double-declining-balance-method. nether this method the concur set is multiplied by a rigid rate and is the most common rate which is use. When using the double-declining-balance-method the salvage value is not considered in determining the annual depreciation but the book value of the asset being depreciated is never br ought below its salvage value, disregarding of the method used.The process continues until the salvage value or the end of the assets useful life is reached. In the last year of depreciation a subtraction might be needed in edict to prevent book value from falling below estimated scrap value. Since double-declining- balance depreciation does not always depreciate an asset fully by its end of life some methods also compute a straight-line depreciation each year and apply the greater of two. This has the effect of converting from declining-balance depreciation to the straight-line depreciation at a midpoint in the assets life.