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One reason for using double-declining balance depreciation on the financial statements is to have a consistent combination of- depreciation expense - and repairs and maintenance expense during the life of the asset. In other words, in the early years of the asset's life, when the repairs and maintenance expenses are low, the depreciation expense will be high. In the later years of the asset's life, when the repairs and maintenance expenses are high, the depreciation expense will be low. While this seems logical, the company will end up reporting lower net income in the early years of the asset's life (as compared to the use of straight-line depreciation).
Each method of depreciation depreciates an asset by the same overall amount over the asset’s life, but each method does so on a different schedule. The straight-line method depreciates an asset by an equal amount each accounting period. The double-declining-balance method allocates a greater amount of depreciation in the earlier years of an asset’s life than in the later years
A business chooses the method of depreciation that best matches an asset’s pattern of use in its business. A company may use the straight-line method for an asset it uses consistently each accounting period, such as a building. Double-declining balance may be appropriate for an asset that generates a higher quality of output in its earlier years than in its later years
Main Reason is Time Value of Money.
I agree with ASIF KHAN to answer this question
it is because its much easier to calculate the depreciation in declining balance than the straight line method due to the no of years n percentage which is already reduced in its previous year.
